ISLAMABAD: In order to broaden the tax base for securing $5.3 billion bailout package from the IMF, the Federal Board of Revenue (FBR) has decided to establish centralised database network for sending 100,000 notices to potential tax dodgers in the current fiscal year.
Tariq Bajwa, Chairman FBR, has finalised an effective enforcement plan for the current fiscal year which will be unveiled before September 4, 2013 when the IMF’s Executive Board will consider Islamabad’s request for approving $5.3 billion bailout package under 36 months Extended Fund Facility (EFF).
“We have decided to utilise data of those 50,000 people who have availed amnesty scheme for regularising their non-duty paid vehicles,” a senior member of the FBR said.
The FBR will send notices to 10,000 potential rich people in the ongoing month and 15000 to another in next month.
The FBR has envisaged revenue collection target of Rs 2475 billion for the current fiscal year as compared to collection of Rs 1942 billion in last financial year. In the last financial year, the revenue collection went up by just 3 percent as it ended up with revenue figure of Rs 1942 billion in 2012-13 against a collection of Rs 1884 billion in 2011-12.
Now envisaging a growth of over 27 percent revenue collection is highly ambitious and the FBR’s target should have been fixed at maximum Rs 2350 billion.
When contacted, renowned economist Dr Hafiz A Pasha said that the Sensitive Price Index (SPI) went up from 4 percent to 9.5 percent and recent developments suggest that the inflationary pressure would be entered into double digit in the range of 11 to 13 percent.
The rupee devalued by Rs 1.50 against dollar in interbank in last 12 days as compared to depreciation of Rs 1 in last five months.
“Any effort to impose further taxes will be deathblow and totally unacceptable,” he said that the FBR’s tax target of Rs 2475 billion was highly ambitious as the FBR was eyeing to increase taxation by over 27 percent against a growth of just 3 percent in last preceding year by collecting just Rs 1942 billion.
“Our assessment shows that the taxation target should be fixed at Rs 2350 billion but the government set it at Rs 2475 billion,” he added.
He said that there were different reasons for lowest ever growth in revenue collection in last financial year in the whole history of the country and first reason was concession provided by the PPP regime keeping in view the election year budget that caused a loss in the range of Rs 70-80 billion, including rampant changes of Chairman FBR and in last four months 450 officials were transferred in the tax machinery.
He said that there were risky foreign inflows in shape of CSF, 3G auction, $800 million on privatisation proceeds and $500 million Eurobond. The government expected foreign inflows of Rs 576 billion in the budget 2013-14 against Rs 244 billion in the last financial year.
He said that NFC award was a right step and the IMF had no authority to explicitly point out approval of the CCI for ensuring revenue surplus by the provinces.