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Lower FED, ST payments awaken FBR

Lower FED, ST payments awaken FBR

ISLAMABAD: Low tax collection, especially sales tax and FED payment in the second quarter (October-December) of 2013-14 has awakened the Federal Board of Revenue to investigate reasons contributed to declining collection in each sector.

The FBR is also scanning through the data of top companies including exporters in all leading sectors to check their sales tax and FED payment in October-December of 2013-14.

As per details, the FBR has started the exercise on data of sales tax/FED payments available with the internal database, monthly tax profiles and data compiled by the large taxpayer units and Regional Tax Offices (RTOs). The exercise aims at pinpointing big taxpayers who showed negative trend in revenue collection during 2013-14.

The board intends to know as to why certain companies having a positive track record, have suddenly shown negative trend in sales tax/FED collection. Statements of sales tax and FED paid by leading sectors in 2013-14 would be compared with the corresponding period of 2012 to reach a conclusion. In the first, the FBR will pick units having shown low sales tax/FED collection during the said period on the basis of data analysis of the companies by keeping in view their past tax payments.

Similarly in the second-phase, the FBR will seek reasons for low revenue collection from specific companies. The FBR will also provide opportunity to explain reason for low sales tax collection during 2013-14 and if the unit is closed or has stopped business for any reason, it will be analyzed and action would not be taken in genuine cases.

In the final phase, the FBR will take enforcement action against the units involved in tax evasion, concealment of income or paying low tax by evading the authorities. For this purpose the FBR has tasked special team of experts with analysing revenue trends in each sector for necessary action against the non-compliant taxpayers.

According to the FBR, statements of comparison of sales tax and FED paid by certain sectors show a substantial decline in revenue collection during July-October 2013 as compared to the same period of 2012. These sectors are oil and gas exploration companies, sugar manufacturers, cement, auto parts and beverage manufacturers.