INP-WealthPk

Broadening of Tax Base A Key Priority: Finance Ministry

April 11, 2022

By Abdul Wajid Khan ISLAMABAD, April 11 (INP-WealthPK): The Ministry of Finance has said that broadening of the tax base is a key priority, and the government is taking unprecedented steps to help new taxpayers and maximize tax compliance in the country. The ministry said in its latest monthly economic outlook report that Federal Board of Revenue (FBR) is all set to launch yet another out of the box digital intervention to broaden the tax base. The FBR has already collected information from various sources about the assets and expenditures of persons who are outside the tax net. This information shall be made available to such persons through the FBR’s “Tax Asaan” Portal. The FBR has also taken a further initiative to ensure facilitation in the filing of a tax return by new taxpayers to broaden the tax base by signing a memorandum of understanding (MoU) with the Pakistan Tax Bar Association. Under the MoU, Pakistan Tax Bar will share the lists of qualified and willing members of the tax bar to file tax return of the new taxpayers. The FBR will make this list of tax consultants available to new taxpayers wanting to file tax returns and will facilitate this by payment of a fixed fee for the filing of returns to the tax consultants. The facility will be purely voluntary, and a taxpayer will have an option to avail it free-of-cost or hire his/her own tax consultant. To increase tax net, the FBR has already launched an intensive awareness campaign on the mainstream national media to educate and engage consumers to ensure that tax collected from them at the point of sale (POS) is deposited into the state exchequer and not pocketed by the retailers themselves. The campaign also encompasses a prize scheme worth Rs53 million to be disbursed among 1,007 lucky winners through a transparent computerized ballot to be held on 15th of every month at the FBR headquarters, Islamabad. The ongoing campaign and the prize scheme continue to gain momentum as numbers keep growing up. In February, about 249,000 invoices were verified by customers who shopped from outlets integrated with the FBR POS System as against 153,000 in January 2022. The number of customers who successfully verified their invoices has also jumped from 27,000 in January to around 39,000 in February. This is a phenomenal increase in public participation and is likely to further grow with every passing day. As a result of strong enforcement by the FBR Field Formations across Pakistan, out of around 4,200 identified as tier-1 retailers, over 3,600 have already integrated their business operations with the FBR POS System. Their 17,000 outlets with over 19,500 cash counters are fully integrated with the POS system which lends the FBR the facility to digitally monitor their sales and thus ensure that Sales Tax collected from customers is actually deposited into state exchequer, without fail. So far, measures taken by the FBR to increase tax revenue have produced good results. During the first eight months of the current fiscal year, the FBR exceeded its revenue target by 7.7%. In absolute terms, revenue amounting to Rs3,802.1 billion was collected against the target of Rs3,530.5 billion, which is Rs 271.6 billion more than the eight-month target. Collection during Jul-Feb FY2022 is also higher by Rs865.6 billion in absolute terms, and by 30.4% as compared to last year. Domestic tax collection grew by 29% during Jul-Feb FY2022. Within domestic circle, direct tax collection grew by 25%, sales tax 34.6%, federal excise duty (FED) 13.8%, whereas customs duty increased by 37.4%.