On Tuesday 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 new members Inland Revenue Policy and Operations briefed Umar on the overall revenue collection position and measures to overcome revenue shortfall during 2018-19.
Umar showed his confidence in the new team of FBR members, saying that an effective strategy would be implemented to overcome revenuer shortfall of over Rs 100 billion in July-Nov 2018-19.
According to sources, the FBR informed Asad Umar that it will clear the backlog of refunds of sales tax/duty drawbacks in line with the government''s 100-day agenda to improve liquidity of the exporting enterprises. A proposal is under consideration that the sales tax refund claims and customs duty drawback may be paid by State Bank of Pakistan through authorised dealers immediately at the time of realisation of export proceeds. The Treasury Rules, 1997 may be amended to this effect, if needed. The FBR has briefed the minister about the status of imports between Pakistan and China under Free Trade Agreement (FTA) and reconciliation of data between the two countries. The FBR further updated the minister on electronic data exchange between Pakistani and Chinese customs authorities to curb under-invoicing of imports from China.
The FBR updated the minister on the progress on Track and Trace System to be implemented for tobacco sector.
The FBR has informed Asad Umar that the accurate valuation of real estate would be carried out through the DG-IP. The FBR briefed about the powers, functions and organisational structure of the newly established DG-IP.
The networking among different organisations was also discussed with the minister. The FBR explained that exchange of online data with different departments is necessary for expanding the tax base, sources said.
The finance minister was confident that the ongoing exercise of broadening tax base backed by authentic data and information from third-party sources would achieve the desired results. The exercise is different from past campaigns because this time notices to non-filers are based on irrefutable evidences from real estate sector/housing projects/ and motor registration authorities.
The FBR said that tax machinery would make all-out efforts to meet tax projections of Rs 1,100 billion set for the second quarter (October-December) 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.
The FBR suffered a shortfall of over and above Rs 100 billion during July-November (2018-19). The FBR suffered a shortfall of Rs 60 billion during the first four months (July-October 2018-19), as provisional collection during July-October current fiscal year stood at Rs 1,106 billion against target of Rs 1,166 billion.
The FBR has provisionally collected around Rs 1,380 billion during July-November (2018-19) against Rs 1,302 billion during the first five months of (2017-18), reflecting an increase of Rs 78 billion.
During November 2018, the FBR revenue collection stood at Rs 278 billion against the target of Rs 313 billion, reflecting a shortfall of Rs 35 billion.
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 stands 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.