Expecting more revenues during next financial year
From SHAMIM AHMED RIZVI,
Islamabad
June 11 -17, 2001
Exactly one year after the launch of tax surveys
and documentation of economy campaign in May 2000, the Central Board
of Revenue briefed Islamabad journalists last week on its achievement
during the year claiming creditable results, Wakil Ahmed Khan,
official spokesman of the CBR said that in terms of net collection of
revenues it has not achieved the results as anticipated for the first
year, that it has provided huge data and vital information about the
tax evaders which would help the broadening of national tax base with
enhanced tax net. We can expect more revenues during the coming
financial year.
Wakil Ahmed Khan admitted that there has been an
increase of at least 38 billions revenues during first 10 months of
current financial year (2000-2001) against about 100 billion
anticipated for the year at the time of the launch of surveys and
documentation campaign. The Rs. 38 billion increase in (July-April) 10
months of this year over the corresponding period last year is merely
because of the survey. Inflation and rupee dollar exchange in favour
of the latter during these 10 months has not impacted any increase in
revenues. This was while all other economic indicators have also shown
decline, meaning thereby that the revenue boost was caused by survey
exclusively since new registrants were brought onto tax books, a
caution against under statement of income source the figures of which
are now in possession of the CBR, was sent countrywide. He said that
the CBR is yet to process this information pooled with the Board.
Notices would be sent to persons who are found to have misstated their
sources. He hoped that the initial target of 100 billion will be fully
met during the fiscal year 2001-2002. He said the survey was initially
envisaged for an increase in tax receipts but now the policy has been
changed. "We are not in favour of generating revenues at the cost
of economy. We have revised the strategy of survey since the original
policy of physically taking stocks and turnovers was not popular with
the business community," he added.
The tax survey and documentations of national
economy exercise was to be completed in 3 phases of 4 months each.
During the year however, only two phases could be completed. The 3rd
phase which was to start with effect from March 1, 2001, as per
earlier schedule, has now been postponed to July 1. The reason for
this postponement, is that the work related to the first two phases
has not yet been completed as over 6 lacs forms out of 15 lacs
distributed in the second phase are still to be retrieved from the tax
payers. This delay, mainly due to the inefficiency of the CBR
officials will however provide a justification to them for their
failure to meet the tax collection target for the financial year
2000-2001 ending on June 30 next. For this financial year revenue
collection target was initially fixed at Rs.450 billion which was
later revised to 435 billion and then further down to 417 billion.
Although the spokesman insists that CBR will be able to achieve the
revised target but it seem rather impossible as during the first ten
months (July-April) the actual collection has been approximately Rs307
billion. According to experts they would hardly meet the figure of
Rs.400 billion.
Presiding over the meeting of the Ministry of
Finance and CBR officials to review the progress on the ongoing tax
survey in Islamabad in November last the Chief Executive Gen. Pervez
Musharraf had directed the participants that they must ensure an
increase of Rs.100 billion on the revenues during the current fiscal
year as targeted in the budget. He, however, assured that the ongoing
tax survey for documentation of economy will continue as planned at
all costs. The CBR will be provided full support in their task but
they must come to the expectation this time.
The Central Board of Revenue (CBR) expected a
collection of revenue of Rs.435.6 billion during 2000-2001 against the
actual collection of Rs.345.51 billion during the last financial year
— an addition of Rs.90 billion to be raised through on going tax
surveys during the current financial year. They expected to increase
revenue to Rs.550 billion in 2001-2002. The CBR officials assured the
Chief Executive that these targets could be achieved provided the task
of documentation of economy was carried out in all sectors of economy
with full backing and support of Armed forces.
While the budget estimates for the current fiscal
year were generally believed to be too optimistic, both the CBR and
Minister for Finance Mr. Shaukat Aziz sounded more than confident that
will not only achieve but exceed the target fixed. Finance Minister
told newsmen that the projected 24 per cent rise in tax revenue was
aggressive but not unrealistic pointing out that without much effort
this year there was a 17 per cent increase in revenues. If we don't
plan aggressively we will never get out of this quagmire we are in, he
added.
Despite delays and inefficient handlings for
various reasons, some out of control of tax authorities, it is a
matter of satisfaction to note that the survey and registration drive
has finally taken off in the country. The need for this drive had been
felt many a time in the past but the concept of documentation could
never previously be translated in to a practical reality. The present
government, however, was courageous enough to take up the task, which
at the time seemed impossible. Thus, a data base has been created and
it is hoped that in future the drive would go on with the same
momentum and spirit as it is not only desirable but also essential to
ensure the economic survival of the country in the times to come.
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