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Better administration with change of government

Special Correspondent, Islamabad
Dec 27, 1999 - Jan 02, 2000

The Central Board of Revenue (CBR) has informed the Chief Executive Secretariat that it expects to collect an additional Rs. five billion in taxes due to "better administration with change of government". The additional collection figure would touch Rs. 13.2 billion rupees if general sales tax on consumer's electricity bills is added to the number. CBR says the new levy on electricity bills would fetch the government a further Rs. 8.2 billion under the head of general sales tax. Similarly, imposition of sales tax on petrol and petroleum products would net additional revenue during the year of Rs. 12.2 billion.

In a report charting out likely tax collection figures for fiscal 1999-2000, CBR says it hopes to collect Rs. 365.5 billion in tax revenue by the end of the ongoing fiscal. The report suggests that CBR would have collected no more than Rs. 360.72 billion had Mian Nawaz Sharif stayed on to be the Prime Minister.

The tax collector has already exceeded its targets for the fiscal's first five months until November. Total tax collection during the period has exceeded the target of Rs. 122.1 billion by Rs. 4.51 billion. Collection figures show that CBR collected Rs 126.261 billion in the five months to December, 1999.

However, CBR's own statistics belie its claims. While it has attributed additional collection to better administration, the only area where collection has surpassed targets is that of sales tax where fresh taxation measures are the catalyst behind improvement.

CBR collected almost Rs. seven billion in excess of sales tax collection target of Rs 32.48 billion for the five months ending November 30. Otherwise, collection of direct taxes, customs duty and excise duty lagged behind the targets.

The tax collector's contention that additional collection "due to better administration with change of government" is couched on the premise that having collected just over Rs. 126.26 billion in five months, it can collect Rs. 239.24 billion in the next seven months.

Bulk of the additional revenue will come during the ongoing fiscal year from levy of general sales tax on fuel and other petroleum products as well as on electricity consumption. CBR expects to collect another Rs. two billion from the levy of general sales tax on gas bills.

The net effect of fresh tax measures under the sales tax head comes to Rs 12.8 billion on account of non-implementation of budgetary measures in the Federally and Provincially administered tribal areas as well as on the textile sector which will cause accumulative revenue loss of Rs. two billion to the government.

According to the figures compiled by the Central Board of Revenue, revenue from defence under the head of customs duty will fall by Rs. half a billion due to exemptions extended by the government. Loss of revenue due to abolition of customs duty on petroleum products would be off set to a great extent due to levy of central excise duty on such products. Figures show that CBR expects revenue loss of Rs 3 billion because of abolition of customs duty on petroleum products but hopes to collect Rs 2.3 billion through central excise duty on the same.