ISLAMABAD: Federal Board of Revenue is all set for phasing out all the tax exemptions within three years as the total exemptions have reached to Rs. 480 billion.
FBR Chairman Tariq Bajwa while briefing the Senate Standing Committee on Finance, Revenue, Economic Affairs, Statistics and Privatisation said that this step would help enhance over all tax collection.
He said that the withdrawal of tax exemptions during next budget would help materialize additional Rs 240 billion of revenue collection in the country. The chairman apprised the committee chaired by Senator Nasreen Jalil that several steps had been taken to increase revenue collection in the country and about 90,000 notices were issued to potential tax payers for bringing them under the tax net.
He said that efforts were under way for preparing an actionable data for potential taxpayers in collaboration with National Registration and Database Authority (NADRA) adding that FBR has started working with the provincial governments to collect data of land transactions during the current financial year.
“We are also collecting data of high paid tuition fees, people who frequently travelled abroad but did not contribute in tax and other potential tax payers to bring them under tax net for further improving the revenue collection,” he added.
Bajwa said that out of the total notices served so far, about 86,000 people were brought under tax net. Notice serving ratio was increased by 50 per cent whereas the rate of voluntary compliance rate has also seen significant rise.
FBR Chairman told the committee that about 12,000 people who were served the notices did not comply with the notices. They would be dealt with according to the rules and regulations. He informed the meeting that about 90 million national identity cards were issued where as 850,000 people in the country have National Tax Number.
Senate Committee was informed that about 711,000 people have deposited their tax during last financial year adding that tax collection during last three quarters posted increase as compared to the same period of last year.
The meeting was also informed that no individual SROs were issued during the current financial year, adding that 56 SROs were issued during last financial year. The meeting was also informed that a proper mechanism was in place to monitor the Afghan Transit Trade which stood at Rs. 127 billion.
Speaking on the occasion, Senator Saleem H. Mandviwalla asked the FBR Chairman to come up with innovative ideas for raising tax collection. He claimed that unofficial economy in the country was larger than the official economy.
Senator Kalsoom Parveen asked for bringing the tax evaders under the tax net instead of imposing tax on already taxpaying citizens.
The Senate Committee also formed a Sub Committee comprising Senator Saleem H Mandviwalla and Syeda Sughra Imam for looking into the tax exemption on high paid fees and submit its report after deliberations.
Senators, Ilyas Ahmad Bilour, Osman Saifullah Khan, Syeda Sughra Imam, Saleem H. Mandviwalla and Muhammad Hamayun Khan Mandokhel attended the meeting.