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Tax amnesty to help meet target: FBR

March 30, 2013

File photo

ISLAMABAD, March 29: The Federal Board of Revenue (FBR) is in a tight position in regard to revenue collection target which is unlikely to be met, and the assurance it gave to the International Monetary Fund (IMF) on implementation of amnesty schemes as part of administrative measures, appears falling flat.

Chairman FBR Ali Arshad Hakeem briefed Prime Minister retired Justice Mir Hazar Khoso on Friday about the difficulties the FBR was facing in attaining tax targets set by the government.

Already with huge shortfalls in revenue collection in the first eight months of the current fiscal year, meeting the downward revised target of Rs2,190 billion from Rs2,381bn by June 2013, is almost uncertain, say tax officials.

However, Mr Hakeem and his team are hopeful of meeting the target subject to implementation of tax amnesty schemes.

The premier was informed that Rs1,210 billion had so far been collected with efforts underway to ensure the target was achieved. “We are expecting that by end March, revenue collection will reach Rs1350 billion”, tax official said.

A source privy to Dawn said that the FBR had sought prime minister’s permission to implement tax amnesty schemes in the absence of a caretaker finance minister. Prime Minister politely informed the tax officials that it was not in his mandate to take decisions on such important issues, while he sought proposals and recommendations from the FBR, with the government’s approval, for increasing revenue collection in next three to four months.

The source further said that the FBR would work out additional revenue measures along with ways to implementing the amnesty schemes.

The caretaker finance minister is expected to be announced in the next few days, who then will take up all revenue measures for achieving the target, he said.

The prime minister was informed that the outgoing PP-led coalition government dropped the idea of presenting tax amnesty bill before the National Assembly at the eleventh hour. However, the standing committees of upper and lower houses had already approved the bill.

“We have already told the IMF that the tax base would be broadened to over 3.5 million taxpayers,” the source said.

The IMF team has rescheduled their visit to Pakistan to later part of April because of delay in implementing amnesty schemes and appointment of a finance minister, a senior tax official confided.

“We’ve informed the prime minister that the schemes will have to be implemented as Pakistan has already committed to donors”.

However, the FBR estimates that the revenue collection would hardly be at Rs200bn if the tax amnesty schemes were not implemented. Rather, an ensured growth of 15 per cent in next three months will help the FBR in achieving the target.

An official statement issued after the briefing said that Mr Khoso had laid stress on reducing reliance on external financial assistance and mobilization of internal resources for sustainable economic development.

He made the observations after a review of the current revenue situation put forward to him during the FBR briefing.

He said that the need for finances cannot be overemphasis and directed the FBR to make all out efforts to attain the revised target because the revenue collected so far warranted immediate attention and necessary measures.