The Central Board of Revenue (CBR) has devised an
extensive programme to achieve the highest ever revenue target of Rs.
580 billion set out in the budget of the current (2004-05) budget, which
is entirely different from the approaches adopted in the past. Neither
of any new tax has been imposed nor any increase in the rates of
existing taxes has been ordered. Infact many concessions including
reduction in some taxes has been allowed. The new chairman of CBR is
determined to achieve the high target by closely acting with the
business community, creating conducive atmosphere, keep pace of high
growth rate and broadening tax base.
The new business-friendly approach of the CBR was
noticed by many from an advertisement released by the CBR expressing
thanks to the tax valued taxpayers for their cooperation enabling it to
collect Rs. 516 billion in 2003-04 exceeding the original target of Rs.
510 billion. This advertisement, which was published in leading national
dailies, came as a pleasant surprise to all concerned. Credit goes to
both the taxpayers and the tax collectors but it was never acknowledged
before. Tax departments have never been deemed as friendly by the
business sector. Always being at conflicting wavelengths, these two
could never reconcile their perceptions. Hence these has always been
gaps in meeting tax revenue targets by the CBR and simultaneously loud
complaints by track and industry against the tax collectors. In the high
of old hostility between the two, the recent change can be described as
refreshing. If the business sector will do well, it will be willing to
share its gains with the government, which has an obligation to create
conducive atmosphere. It is very much in national interest that the
government and the business must work together for economic progress of
In Islamabad last week taking to a group of newsmen
CBR Chairman Abdullah Yusuf said the government expects to raise number
of tax payers from about one million to 1.5 million in the current
budget as it has accepted all genuine demands of the stakeholders. Now
ball is in their court, he remarked. At present, he said out of total
taxpayers, 1300 are from corporate sectors, 0.425 million from salaried
class and only 0.6 million are from non-corporate sector. While, he
said, 3.5 million power connections are of commercial categories in the
country. After the passage of the budget in the National Assembly, he
said extensive meetings were held relating to all sections of the CBR to
prepare programmes for tax collection in the current fiscal year and
took hold decisions to facilitate the taxpayers.
A one-page Return Form has been introduced after
consulting with business community and other stakeholders. It was
decided to launch a campaign next month in all small and big markets of
the country to educate the businessmen with regard to payment of tax.
This motivational programme will be backed by visits of officials of CBR
in all the markets to provide guidance to the taxpayers. A friendly
atmosphere has been created and there will be no harassment at all, he
"The government has already provided relief to
traders, businessmen and industrialists," he said and added that
feed back was very good. Any businessman having business under turnover
of Rs. 5 million can pay 0.75 percent tax to get his business legalized.
There will be no random check at all. Referring to corporate sector
which is major revenue spinner, he said special incentives have been
offered including removing of cumbersome procedures. He said the CBR has
a complete list and record. He hoped incentives with regard to
withholding tax will yield results.
Abdullah Yusuf said for the first time a complete
data of each and every industry is being compiled with regard to sale
and capacity of the units. It will help to assess actual return and with
regard to tax payment. The computerized data will immediately speak
about the gap, he said. The campaign in this sector will be started in
November. He said that the issue of claims of refund is also being
addressed. There are lots of leakages, which will be plugged. Major
sector is cotton and almost Rs. 52 billion refund goes to this sector.
Out of it Rs. 35 billion refund goes to textile base units. The
government has rationalized tax on cotton and by this measure the level
of refund will come down, it will benefit the government.
Referring to custom side, he said complete automation
is being achieved and e-custom is being introduced as a pilot project.
An aggressive programme is being launched and the entire system will be
electronically managed by eliminating interaction between tax officials
and taxpayers. Scanners machines are also being installed to scan the
containers. The problem of under invoices and over invoices will be
resolved by this system. Alternative Dispute Resolution Committee
representing two members from the private sector and one from the CBR
will take up the disputes and resolve them speedily.
He said the decision has been taken not to stop any
consignment in future and it will be released subject to confirmation of
price. He said already 9000 pending consignments are rotting in Karachi
and a row between CBR and traders was continuing unabated. Some disputes
are very old, he said. Now, he said a committee has been formed giving
authority to clear these assignments within this year. It is a bold
decision, which will also be applied to other consignments lying in
different places of Pakistan. Another programme is being launched to
contract the big companies to get information about the dealers in
different cities and their potential sales. They will be registered.