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1- NEW INITIATIVE IN PRIVATIZATION AND INVESTMENT
2- REVENUE COLLECTION FOR THE FIRST SIX MONTHS
3- PAKISTAN: THE BEST PERFORMING EQUITIES MARKET
4- NATIONAL SAVING SCHEMES
5- TRANSFER PRICING BY MNCS
6- NPV: METICULOUS MEASURE OF PROJECT EVALUATION?

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REVENUE COLLECTION FOR THE FIRST SIX MONTHS

 

First ever in the history of CBR to cross the figure of Rs.200 billion in the first six months

 

From SHAMIM AHMED RIZVI, 
Islamabad

Jan 13 - 19, 2003
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Perhaps for the first time in its history, the Central Board of Revenue (CBR) has almost met the target of the first six months (July-December 2002) of the current financial year by collecting Rs.2003 billion against estimate figure of Rs.200.5 billion.

Member Direct Taxes, Vakil Ahmed Khan told newsmen that it would be first ever in the history of CBR to cross the figure of Rs.200 billion in the first six months of a fiscal year. It exceeds the revenue collection during the corresponding period last year by about Rs.25 billion showing an increase of about 16 per cent. In December the collection was about Rs.42 billion against 38.9 billion in December last year. This includes about Rs.92 billion as sales tax about Rs.27.5 billion as custom duty about Rs.20 billion as central excise and about Rs.61 billion as income tax.

The CBR is expected to collect Rs.260 billion during January-June 2003 to meet the yearly target of Rs.460 billion for financial year (2002-2003). Although the CBR has achieved the set target of first six months but the Board really requires concerted efforts in the remaining period of the current fiscal to meet the desired target by the end of the day.

The tax-GDP ratio in Pakistan remained the lowest in the world, which had ranged from 11 to 12 per cent during the last decades. This showed the bitter reality that neither the political nor the military regime had made hardly any efforts for bringing improvement in tax-GDP ratio.

Besides, the tax system in Pakistan was less elastic and buoyant. A comparison with countries of same per capita income ranging from US$ 360 to US$ 750 also indicated the tax-GDP ratio in other countries was much higher than Pakistan.

The tax-GDP ratio in Sri Lanka stands at around 20 per cent and the Musharraf government also aimed to bring this ratio up to 20 per cent through tax survey exercise but it failed to pursue this agenda without any interval.

The size of non-documented economy remains high and according to the World Bank estimates if Pakistan's economy is fully documented it can collect Rs.600 billion per annum in taxes at the prevailing rate of taxation.

 

 

According to tax experts different governments in past have failed to bring the desired improvements through conventional methods and there is a need to initiate concerted efforts with a clear mind to bridge the fiscal deficit of the country with our own resources, hovering around more than Rs.200 billion per annum.

Replying to questions of the newsmen Member Taxes admitted tax-GDP ratio has not increase despite increase in revenue collection. He, however, sounded confident that the target of Rs.560 billion will be met by the end of current fiscal.

He explained that CBR was taking several measures to improve the tax-GDP ratio. Vakil Ahmed Khan further said that CBR would also hire the services of major industries specialists which would help in developing huge database for achieving desired improvement in tax collection system of the country. "We will hire services of industries specialists in cement, sugar and textile related sectors to get first hand information of major industry of the country", he added.

He said that the CBR wanted to utilise all gathered information upto maximum level and expertise of everyone would be applied in every tax to serve the country. He said that it was established fact that wherever in the world restructuring process was going on, there would be dip in tax collection but the CBR had achieved its desired revenue collection target in first two quarters of current fiscal year despite moving ahead with reforms plan. When asked about set priorities of CBR, Member Direct Taxes said that broadening of tax base would be the ultimate result of ongoing restructuring process in the CBR.

The Large Taxpayer Unit (LTU) working in Karachi was dealing with 294 giant companies and bigger taxpayer individuals, he said, adding that the real test of CBR would be developing effective system in Medium Taxpayer Unit (MTU) in Lahore, which would deal with 4,000 traders.