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
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