On Thursday evening, Finance Minister Asad Umar visited FBR House where he was briefed on revenue collection position, reforms and track and trace system for excisable commodities. FBR Chairman Mohammad Jehanzeb Khan and members briefed Asad Umar on the overall revenue collection position and measures to increase collection during 2018-19.
Tax authorities informed the finance minister that revenue collection target for the month of October 2018 was set at Rs 315 billion. Against the assigned target, the monthly collection amounted to Rs 270 billion, reflecting a shortfall of Rs 45 billion. In September 2018, the FBR has witnessed shortfall of Rs 15 billion. Therefore, the accumulative shortfall in first four months (July-October) of the fiscal year 2018-19 totalled at Rs 60 billion.
The FBR had provisionally collected over Rs 836 billion during the first quarter (July-September) of 2018-19 against assigned revised revenue target of Rs 851 billion during the first quarter, reflecting a shortfall of Rs 15 billion.
The FBR also informed Asad Umar that the tax machinery is facing an uphill task to meet the ambitious revenue collection target of Rs 1,115 billion in the second quarter (October-December) of 2018-19.
The FBR has suffered shortfall of Rs 15 billion during the first quarter (July-September) of 2018-19. The tax projections of Rs 1100 billion for second quarter plus shortfall of Rs 15 billion in the first quarter of 2018-19 would require FBR to collect Rs 1,115 billion during the second quarter (October-December) of 2018-19.
Break-up of revenue collection target for the second quarter of 2018-19 revealed that the Inland Revenue Service (IRS) has to collect Rs 930 billion and Customs is required to collect Rs 185 billion during the second quarter (October-December) of 2018-19.
According to the FBR, during the first quarter of the current financial year the FBR recorded a provisional net revenue collection of over Rs 836 billion as against Rs 766 billion collected during the same period of the previous fiscal year, including collection on account of book adjustments. The assigned revised revenue target for the first quarter is Rs 851 billion.
Asad Umar was informed that the FBR has estimated to collect Rs 71 billion from four areas i.e. recovery from audit, high net worth individuals, liquidation of litigation cases and revenue from tobacco sector during the year 2018-19.
Sources said that the FBR has estimated tax demand from audit/high net worth individuals to the tune of Rs 37 billion, expected revenue generation from liquidation of litigation cases would generate Rs 20 billion and estimated revenue from tobacco sector stood at Rs 14 billion. The accumulative effect of the said measures comes to Rs 71 billion.
The FBR has also informed Finance Minister Asad Umar that the expected demand from audit/high net worth individuals has been worked out by the FBR. A huge pendency of audit under section 214-D will be liquidated by invoking the provision of 213-E in the amended Finance Bill 2018.
In addition, over and above 373 cases were identified as high net worth evaders who did not file tax returns. This exercise will be vigorously extended on continuous basis to identify major non-filers drawing huge amounts of income / holding high value assets.
Under the phase-I, list of 148 cases of non-filers who invested in immovable properties (above Rs 20 million) and luxury motor vehicles (above 3000 cc) was prepared by the FBR.
In the phase-II, the FBR has identified 75 tax evaders across the country. List of 75 cases of non-filers individuals was made. Out of this, 59 cases are of purchase of immovable properties (registered value of Rs 20 million and above), 10 motor vehicle purchase cases (1800 cc and above) and 6 are rental income cases (annual rent of Rs 10 million and above).
Under the phase-III, the FBR has picked 220 tax evaders. List of 220 cases of non-filers was finalised by the FBR. Out of this, 29 cases are related to the purchase of immovable properties (registered value of Rs 20 million and above) and 191 cases deal with the motor vehicle purchase (1800 cc and above).
Under the phase-IV, the FBR has identified 22 high net plazas including eight at Karachi, 12 in Islamabad and two plazas are in Lahore.
Moreover, a letter has been issued to DG (BTB) to provide the feedback of notices issued to high net worth individuals (HNWIs). The courier service has confirmed delivery of 91 notices to the tax evaders. Pursuant to the said measures, FBR is expected to generate revenue of Rs 20 billion.
In case of tobacco sector, check posts have been established at entry points to ensure payment of due tax. The officers have been posted under the Rule 87 of Federal Excise Rules 2005, at all green leaf thrashing (GLT) units to ensure payment of duties at source. It is expected that additional revenue of Rs 14 billion will be generated from tobacco sector.