FBR directed to achieve tax collection goal

ISLAMABAD: While expressing concern over the dwindling tax-to-GDP ratio in Pakistan, caretaker Finance Minister Dr Shamshad Akhtar on Friday directed the Federal Board of Revenue to come up with a detailed strategy to identify potential areas to broaden the narrowed tax base. The minister was of the view that the caretaker government had a limited timeframe, so it would have to undertake much-needed reforms at the earliest.

However, the minister did not come up with any kind of prescription for jacking up the tax-to-GDP ratio, which had declined to around nine percent of GDP in the last financial year from earlier numbers of over 11 percent. The rebasing of national accounts done by the PTI-led regime had resulted in ballooning the size of the GDP, so the tax-to-GDP ratio declined significantly.

It is relevant to mention that Special Assistant to PM on Finance Dr. Waqar Masood was not present in this meeting. Sources said that the minister was not aware of the blunders committed by the FBR, whereby the circular was amended to stop collecting tax

under 7E of income tax on transferring property and doing away with the requirement of the commissioner to get an exemption certificate only in Punjab and ignored all three remaining provinces as well as Islamabad Capital Territory (ICT) for providing any tax incentives.

According to an official announcement made by the FBR here on Friday, the newly-appointed Caretaker Federal Minister for Finance and Revenue Shamshad Akhtar visited the Federal Board of Revenue Headquarters and held a meeting with Chairman Malik Amjed Zubair Tiwana and members of the board to review the revenue collection performance of the FBR. Secretary of Finance Imdadullah Bosal and senior officers from the FBR and the finance ministry were also present.

During the meeting, the FBR chairman gave a detailed presentation to the minister about the revenue collection performance, including the assigned targets for the current financial year 2023-24 and the strategy to achieve them. He said that the FBR was able to collect Rs7,169 billion against a target of Rs7,200 billion in the previous financial year.

The chairman said that all efforts will be made to meet this year’s collection target of Rs9,415 billion. He also informed the caretaker minister about the procedural improvements being made to simplify the process of paying taxes to facilitate taxpayers. He also gave an update on important initiatives, including the broadening of the tax base, the track and trace system, and the point of sale system, whereby efforts are afoot to further enhance revenue generation.

The minister emphasised devising strategies to further enhance the tax-to-GDP ratio and broaden the tax base to maximise revenue collection. She also called for finding innovative ways to tax the untaxed sectors and stressed all-out effort to achieve the ongoing year’s revenue collection target.