FBR’s back-up plan if tax amnesty schemes delayed

ISLAMABAD: The Federal Board of Revenue (FBR) is all set to launch an alternative plan to boost revenues if parliamentary approval of the tax amnesty scheme is delayed due to Tehreek-e-Minhajul Quran chief Tahirul Qadri’s proposed march on Islamabad. Under this plan, the FBR will send notices to 0.5 million tax evaders on January 20, directing them to pay taxes with penalties.

“We are tracking major tax evaders through centralised software and intend to issue them notices,” confirmed FBR’s senior member Inland Revenue Asrar Raouf in response to a question regarding a possible hold-up of the amnesties. “It will take 120 days to bring them into the tax net.” The upper house of Parliament has already passed the tax amnesty bill with certain amendments and sent it to the National Assembly. Earlier, tax authorities thought that the lower house would be called to session around January 14 and the bill passed accordingly. The government is set to make allout efforts to get the bill approved since defeat of a money bill means curtains for the government. However, Qadri’s marching plans scheduled for January 14 have thrown a spanner in the works.

According to Raouf, the FBR has identified 3.1 million potential taxpayers who enjoy high consumption patterns but do not pay taxes. “We intend to send notices to all the big fish we’ve identified over the course of the ongoing financial year but in the first phase, the FBR will send notices to between 0.2 million and 0.5 million individuals,” he said.

Raouf said that the FBR would have to amend certain rules before issuing these notices, as these evaders will be asked to file electronic returns. “If these evaders cannot file electronic returns, we will set up facilitation centres at certain points for those who want to pay their due taxes.”

Raouf said that the FBR has collected Rs18.5 billion in the first eight days of January 2013 as compared to Rs15.2 billion collected over the same period last year - an increase of 22 percent. “In the first six months of the current fiscal, the FBR has collected Rs897 billion. Efforts are under way to achieve the desired target of Rs2,381 billion for the current fiscal year.”

However, finance ministry sources said that Pakistan conceded before the visiting IMF team that the FBR’s envisaged revenue target will be revised downwards - from Rs2,381 billion to Rs2,231 billion - while aiming for the set budget deficit target.

Indirectly conceding the same, Raouf said that revenue estimates are based on factors including nominal growth [real GDP growth plus inflation] as well as overall law and order and political situation of the country. “If strikes cripple the country, revenue collection will witness a dip,” he said, adding that while the decrease in international POL prices was good for consumers, it negatively impacted the FBR’s tax collection efforts.

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