Stakeholders for direct taxes in next budget: FBR chief

ISLAMABAD: The suggestions from various stakeholders have started pouring in at a good pace for next fiscal year’s budget. The emphasis on direct taxation is being widely welcomed across the country that also has priority in the ongoing budget.

It is likely that next financial year’s budget would include a similar emphasis. Chairman Federal Board of Revenue (FBR) Aasim Ahmad said this in an exclusive chat with The News here Friday.

He said direct taxation has been received well by the consumers and masses as it helps in saving the common man from the undue burden of sharing the taxation. The Chairman said that despite ambitious tax collection targets his team made huge efforts to produce results for which he is thankful to them. To a question about the preparations and expected outlines of the next year’s budget, Aasim Ahmad said that the board has just completed a supplementary budget which was an equally laborious task but whenever the government would ask the FBR to start working on the next fiscal year’s exercise, the board would initiate its assignment.

Ahmad maintained that for the sake of improvement of tax policy, proposals have already been invited for the next budget to benefit from the collective wisdom of all the stakeholders. He said that traditionally recommendations do keep coming till May but the major chunk comes in ongoing weeks. The FBR greatly benefits from the suggestions in the formulation of income tax proposals for the Finance Bill, he said. The board is forthcoming in welcoming input/suggestions for broadening the tax base for wider participation in revenue generation efforts; taxation of real income on a progressive basis; phasing out of tax concessions and exemptions; removal of tax distortions and anomalies; facilitation of taxpayers and ease of doing business; promoting equity in taxation by introducing measures where the incidence of tax is higher on affluent classes. The Chairman was satisfied with the response of the stakeholders in the matter.

To another query, Aasim Ahmad reminded that political instability does have an effect on the budget and tax collection as the economy has a direct link with social peace and order. Aasim Ahmad expressed satisfaction about the revenue collection performance of the board the last month as the board had demonstrated great revenue collection performance during February 2023, despite the difficult economic situation. According to FBR provisional figures the board collected Rs. 527.3 billion against the target of Rs. 527 billion during the month, exhibiting a growth of 16.3pc compared to the same month last year.

Cumulatively, the FBR has collected Rs. 4,493 billion in the first eight months of the current financial year against Rs. 3,820 billion collected in the corresponding period of last year depicting a year-over-year growth of 18pc. The FBR continues to show impressive performance during the third quarter of the current financial year which displays its unwavering commitment towards achieving the revised upward annual budgetary target of Rs. 7,641 billion despite economic challenges.

As per the provisional data, direct tax collection grew at a robust pace of 47pc during the first eight months of the current financial year which is reflective of the government’s policy of making taxation progressive and equitable by shifting the tax burden towards society’s wealthy and affluent segments. This consistent growth in direct taxes, particularly those from domestic sources, is, in large part, due to administrative and enforcement measures of the FBR. The contribution of domestic taxes has increased from 49.4pc last year to 58.7pc during the current year, pointing towards the success of policies aimed at reducing reliance on import duties and taxes.

Furthermore, it is also significant that the collection from Customs Duty has shown an increase of two pc during February 2023 compared to the same month last year.

FBR has also stayed on top of addressing exporters’ liquidity needs through the issuance of Rs 235 billion in refunds during the first eight months of the current financial year as against Rs 198 billion during the corresponding period of last year-a year-over-year increase of 19pc.

The FBR sincerely appreciates all those taxpayers who diligently fulfilled their national duty of paying due taxes. This would go a long way in achieving the budgetary target and also lauds the endeavours of all field formations and their officers for their untiring efforts and commitment to optimizing revenue collection in challenging economic situations. This growth in tax revenues, especially direct taxes, underscores the resolve of the government and FBR to make Pakistan a thriving, resilient and self-reliant nation which has the will and capacity to withstand the current economic challenges, the FBR chairman added.