ISLAMABAD: The tax base has been broadened significantly in the first year of the PTI-led coalition government, according to a presentation given by the Federal Board of Revenue (FBR) to Prime Minister Imran Khan on Thursday, as the number of new tax return filers has more than tripled during the period.
The data showed that as many as 783,039 new taxpayers filed returns with the tax department as a result of various schemes, including tax amnesty schemes. The government also facilitated people to file their returns by extending the filing deadline a record eight times. In terms of revenue, FBR received Rs2.583bn from these new return filers.
For comparison, the premier was showed data reflecting that in the last year of PML-N government, only 190,391 new taxpayers were added to the total number. Similarly, the revenue collection with those returns remained low — Rs717 million during tax year 2017.
Briefing also highlights revenue collection performance in current fiscal year and facilitation measures for taxpayers
The total return filers in the first year of PTI government has reached 2.561 million in tax year 2018 as against 1.514m over the previous year, reflecting an increase of 69.1pc.
However, the presentation given by the FBR officials made no mention of the large revenue shortfall of Rs580 billion in the same year despite a significant downward revision of the target.
The FBR chairman was replaced once the shortfall began to become apparent. In the first two months of the current fiscal year, the FBR has seen a shortfall in revenue collection of almost Rs64 billion.
FBR chairman Shabbar Zaidi and his tax team briefed the premier over the performance of the tax department.
At the outset, the premier made it clear that his government’s top priority is to eliminate corruption from the FBR and bring about reform. He said the revival of public trust in the FBR is the key to help broaden the tax net.
The briefing covered three main areas — broadening of tax base, revenue collection performance in July-August 2019 and facilitation measures for the taxpayers.
Mr Zaidi briefed the premier over the first two months (July-August) revenue performance in comparison with the last year. The revenue collection was recorded at Rs579bn between July and August 2019 as against Rs505bn collected over the same months last year, showing an increase of 14.65pc.
The overall growth was achieved despite 5.83pc negative growth in customs collection, which fell to Rs97bn this year as against Rs103bn over the same months last year. The contraction came on the back of falling imports.
The income tax collection has reached to Rs188bn this year as against Rs172bn over the last year, showing an increase of 9.3pc. The growth in the collection of sales tax has been recorded at 26.92pc to Rs264bn as against Rs208bn over the last year.
The Federal Excise Duty collection was recorded at Rs28bn as against Rs21bn over the last year, showing an increase of 33.33pc.
Mr Zaidi informed the premier that the collection of domestic taxes recorded overall growth of 28pc mainly led by a growth of 16pc growth in income tax collection, domestic sales tax collection up by 53pc, and domestic FED growth of 39pc, respectively. However a significant portion of this increase would be explained by 10pc inflation from the same months last year.
For taxpayers’ facilitation and automation, FBR chairman said that all steps are being automated related to registration of taxpayers, issuance of certificates, return filing, audit and minimizing personal interaction to exclude the involvement of the FBR officials in these processes.
On the issue of visiting markets from September 1, PM Khan asked FBR that the tax officials will have to ensure the on-spot-recording of all of their official interactions during visits to different markets.
Mr Zaidi said FBR teams are visiting markets to help raise awareness in the people about online registration of mobile phones brought from abroad, currency declaration system at airports and advance passengers information system besides public awareness on smuggled goods.
He said FBR in collaboration with NADRA has introduced Sahulat Web Portal so that everyone could have access to information online. He said online system of FBR would be made more effective. He insisted that the FBR is facilitating businessmen in the country.
The chairman said tax refunds worth Rs16bn have already been made and another Rs17bn would be refunded by end of the current month.
Published in ThePublic, September 6th, 2019