While briefing the meeting of Senate Standing Committee on Finance, chaired by Senator Saleem Mandviwalla, FBR Chairman Tariq Pasha and other senior officials claimed that various factors were responsible behind the decline in revenue collection. The committee was told that the target was revised downward to Rs 3,521 billion for the last fiscal year but the actual collection was Rs 3,362 billion.
The meeting was informed that the FBR collection of Rs 3,362.1 billion included Rs 1,344.5 billion direct taxes, Rs 1,332.3 billion sale tax and Rs 1,89.2 billion Federal Excise Duty (FED) while Rs 496.1 billion were collected from customs. There was an increase of 8 percent in revenue collection of the FBR during 2016-17 over a year before. The meeting was informed that the government suffered revenue loss of Rs 50 billion from cigarette industry due to smuggling but corrective measures are being put in place to avert the situation in the current fiscal year.
The revenue target for fiscal year 2017-18 has been fixed at Rs 4,013 billion. The required growth is around 19 percent over the provisional collection of Rs 3,362.1 billion collected during fiscal year 2016-1 7. In absolute terms, Rs 650 billion additional revenue will be collected in 2017-18.
The committee was also briefed on July 2017 depreciation of rupee against dollar. The committee chairman and member of the committee after a briefing from State Bank of Pakistan (SBP) in their brief interaction with media stated that the committee expressed concern over the issue. However, the committee members were divided between those who believed the then SBP acting governor's decision was right and those who thought it otherwise. Saud Majeed stated that in his opinion the SBP decision was wrong and it was subsequently proven with the correction of the market.
The committee chairman stated that the then acting SBP Governor Riaz Riazuddin briefed the committee on the decision. He added the actual issue was that a decision was taken by the governor which was criticized by the Finance Ministry. "I had taken the decision which I thought was right," the chairman of the committee quoted Riazuddin as saying this. In the subsequent day market corrected itself and according to the chairman of the committee Riazuddin stated: "This is the proof that my decision was wrong."
While responding to a question SBP Governor Tariq Bajwa stated that inquiry report in the matter has been finalized. However, he refrained from answering other question and the committee was held in camera on the request of the SBP governor who stated this to avoid adverse impacts on the market.
While briefing to the committee on joint investigation team, the SBO stated they have neither received phone call nor did face pressure from any side for provision of information. The committee was informed that SBP was requested in writing for provision of information. "We have provided information to the JIT related to the SBP and also some information after collecting from the commercial banks," the SBP senior official stated, adding that commercial banks were also instructed to provide information to the JIT.
While discussing petroleum prices, committee chairman said that in his opinion Ogra should be abolished as its role is nothing in terms of determining the petroleum prices. The committee members have expressed their displeasure that the government was pocketing consumers' benefit through making increases in taxes on petroleum products. The FBR officials defended the increase in taxes on petroleum prices, saying that benefit would have gone to oil companies if the taxes were not increased.
Copyright Business Recorder, 2017