IMF delegation objected to potential risks in the collection of sales tax and customs duty due to reduced imports
ISLAMABAD: Although the Federal Board of Revenue (FBR) has shared revenue streams with the visiting IMF team to meet the desired tax collection target of Rs 9.4 trillion, Fund staff on Friday expressed objections over potential risks in achieving sales tax collection and customs duty due to reduced imports. tax.
FBR’s top brass made an all-out effort to convince the visiting IMF review mission that they could achieve the desired revenue collection target of Rs 9.4 trillion by the end of June 2024 as they had already surpassed the initial target. with a margin of Rs 66 billion in the four-month (July-October) period.
However, in the first round of talks, the IMF delegation was not yet fully convinced that the FBR could achieve the target. “In case of a possible demand to generate additional revenue in the current fiscal year, FBR has taken the position that under the proxy regime, the Ministry of Law is against the implementation of the new Presidential Decree for more tax revenue,” senior official sources said while speaking. News here on Friday.
A senior official confirmed that the IMF review mission did not request any meeting from the ECP. “We have not received any requests for a meeting yet,” an ECP official told The News on Friday night. The ECP does not know whether the IMF wants to meet with them in the coming days. In the first round of technical level talks, the agenda of the IMF and FBR meeting was set under the title “Tax Revenues and Prospects: Budget and Additional Tax Revenue Measures” and both sides discussed the overall taxation framework for the current fiscal. year.
Chairman FBR and his team informed the IMF that they have collected Rs 2.748 trillion so far in the first four months against the desired target of Rs 2.682 trillion. The IMF team asked about the tax collection target for the remaining months, with special focus on the target for the ongoing month (November) and December 2023. The tax collection target for December 2023 will be higher as the FBR has fixed it at Rs 1 crore. Sources said 000 billion could therefore be challenging.
However, the FBR chairman appeared confident about achieving the December 2023 tax collection target with the argument that super tax collection along with corporate returns would help the board achieve the desired target. The IMF also pointed out that the required growth may be difficult next month, so the FBR should focus on bringing potential tax evaders into the tax net. The IMF has also identified agriculture, property and retailers as major income generators, considering its real potential to be as high as Rs 3 trillion on an annual basis.
FBR senior officials said that digitization of integrated data of 126 departments is on the agenda, but a regulation needs to be issued for this. However, the Ministry of Law opposed this, claiming that the interim government could not make a regulation for taxation purposes.
Agricultural revenue is a constitutional issue as the revenue belongs to the state. However, if states allow it, FBR can collect taxes on their behalf. Thus, the general financial situation of the country can improve. For retailers, FBR prepared a scheme but the government did not allow the implementation by notifying rules under the existing income tax law, which has already been approved by the parliament. The FBR was not given the authority to formulate flat tax schemes for small traders and retailers.
news source (dailythepatriot.com)