ISLAMABAD: In the wake of massive shortfalls in revenue collection, Adviser to the Prime Minister on Finance and Revenue Dr Hafeez Shaikh on Wednesday held a detailed meeting with top tax officials and expressed his displeasure over Federal Board of Revenue’s (FBR) performance in the first half of the current fiscal year.
During his first visit to the FBR headquarters after assuming charge on April 20, 2019, the adviser asked FBR officials to take extraordinary measures to increase revenue collection to a level close to the revised target of Rs5.23 trillion.
An official source privy to the meeting told Dawn that the adviser appreciated FBR’s performance over the past two years, but said he was not satisfied with their work during the current year.
Dr Shaikh asked the FBR officials about their plan for the next year. “Where is your plan and why don’t you discuss [it] with me,” he said, asking further “why don’t you discuss your plans with my economic team?” He went on to say that his team was able enough to gear up revenue collection.
Says each dollar not earned by the revenue authority will have to be borrowed
On the restructuring issue, the adviser asked the officials if they considered FBR’s current structure the best. “I have not seen any plan of restructuring,” he said. “Let’s sit together to do brainstorming on reform: how to make it a modernised tax machinery,” the adviser added.
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Extending full support to FBR chairman Shabbar Zaidi, the adviser allowed him to remove all FBR officers who he considered ‘inefficient’ or ‘are not performing’.
According to the official source, the adviser directed the FBR officers to redouble their efforts for an optimal result. He told them that people were looking more towards the FBR because each dollar not earned by the revenue authority would have to be borrowed from somewhere else, affecting future choices of the country.
Dr Shaikh assured the FBR team of his complete support and expressed the hope that the government’s revenue collection arm would not disappoint the nation and work hard to meet the expectations of Prime Minister Imran Khan.
The adviser also asked the FBR to aggressively enrol nearly 20,000 points of sales in the country, according to a statement issued by the finance ministry.
The drive for the installation of automated POS at big outlets had been initiated as part of the government’s drive to document sales of large retailers who were believed to be evading tax payment of billions of rupees. The drive projected to bring 20,000 such retailers into the tax net by the end of June 2020.
Dr Shaikh also advised the FBR management to follow an integrated media and communication plan using all modern tools of information and expertise of top-level service and content providers in the market to communicate with the public and share with them on a consistent basis the results of efforts on revenue collection and tax facilitation, particularly its agreement with the traders.
“An efficient and robust communication with the public and stakeholders should be at the centre of every activity undertaken by the FBR to harness public support for its efforts for broadening the tax base and promoting a tax-compliant culture in the country,” he said.
The adviser said progress on release of tax refunds, information about changes in Form H and the result of other reforms undertaken so far by the FBR would be shared with the general public. “These areas should be the focus of the FBR team in the new year,” he added.
Finance Secretary Naveed Kamran Baloch, Special Secretary Finance Omar Hamid Khan and members of the FBR were also present.
FBR chairman Shabbar Zaidi said the FBR had increased its focus on automation of processes with the result that all steps of interaction with the taxpayers, including their registration, issuance of certificates, returns filing, audit and monitoring had been fully automated.
The chairman claimed that the FBR had given away tax refunds worth Rs100 billion to the taxpayers so far this year as against Rs36 billion refunds given last year.
He said he had appointed five new complaint commissioners for the redress of complaints and by March many of the pending cases would be resolved. He also committed to providing results of their sector-wise collection and progress on new initiatives and implementation of reforms to the adviser in the next week.
Mr Zaidi gave a detailed briefing to the adviser on revenue collection in comparison with the last year. He said the FBR collected Rs2,083.2 billion as per provisional figures for the period between July-December 2019, as against Rs1,790.9bn collected over the previous year, showing an increase of 16.3pc.
The chairman also discussed domestic tax collection that had increased significantly showing 21pc growth in domestic income tax, 34 pc growth in domestic sales tax and 25.6 pc increase in domestic federal excise duty, raising the share of domestic revenue to Rs1,172 billion in the overall tax collection so far as against Rs934.5 billion in the corresponding period of the previous year.
The tax collection at import stage posted negative growth mainly because of drop in imports. The customs collection dropped to Rs320.2bn in the first half of the year as against Rs334.7bn collected over the same period in the previous year, reflecting a decline of 4.3pc. The customs collection also fell short of target by a wide margin.
Published in Dawn, January 2nd, 2020