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  ECONOMY WATCH

By SYED ATIF ALI
Dec 19 - 25, 2005

CBR TAX COLLECTION

FISCAL YEAR 2004-05

The Central Board of Revenue (CBR) showed a remarkable performance last fiscal year (2004-05) reinforcing the record 8.4% growth rate of (GDP) thus significantly contributing towards economic goals. It may recalled that GDP growth on a higher side was achieved only for five times in the economic history of Pakistan which include 1953-54 when GDP growth registered 10.2%, in FY64-65 9.4%, in FY69-70 9.8%, in1984-85 8.4% and again 8.4% in 2004-05. Naturally it was due to good economic decision and policies and of course the concerted efforts and effective application of modern tax collecting pattern.

The government is trying to sustain the performance through improved tax collection process by introducing four types of taxes - direct taxes, sales tax at import stage, federal excise duties (previously central excise duties) and customs duties. These taxes are being callected for many years in Pakistan but the CBR also improved the collection process and introduced people friendly polices about taxes

Efforts were made to expand the taxes base through expanding the network that helped achieve more than what was the actual target. The increased volume of tax collection indicates that the government polices were producing results.

The Central Board of Revenue collected Rs. 591.1 billion which was Rs11.1 billion in excess to the target. Total NTN issued numbered 2,276,395, NTN issued to corporate totaled 23,090, and NTN issued for salary numbered 965,589, against which 1,229,952 number of returns were received - 548,587 fructuous cases, 1,727,808 live cases and match with master index was 821,636 that is 66.8% match with master index and NTN holder companies totaled 23,090 out of which 12,526 returns received, matched with master index 6,032, which is 48.2%. Public companies held 10,684 NTNs out of which 2,116 returns received - matched with master index - private companies hold 11,921 NTNs out of which 7,557 returns were received - 5,092 matched with master index- foreign companies held 494 NTNs out of which 17 returns were received out of 9 matched with master index.

The above database issued by the CBR shows an overall satisfactory condition as compared to previous years. The share of taxpayer to population is 86.4% in Canada, 58% in France, 14.5% in Argentina, 2.7% in India and 1.5% in Pakistan. Pakistan's total population is 150 million out of which only 1.5% people pay the taxes. The government was tring to increase the network of tax collection by adopting modern tax collection methods.

The master index will verify the returns on the basis of NIC (National Identify Number) and NTN (National Tax Number), which will improve the collection process and it may take time but it is accurate and would help in the process of tax collection in future. Being a developing country, Pakistan is developing infrastructure in all sectors and formulating flexible policies in favour of taxpayers, which showed an increase in tax collection.

In 1996-97 total tax collection totaled 282,087 million rupees, 293,631 in 1997-98, 308,509 in 1998-99, 347,104 in 1999-00, 392,277 in 2000-01, 404,070 in 2001-02, 460,627 in 2002-03, 520,843 in 2003-04 and the remarkable collection of 591,085 million rupees in 2004-05. The achievement shows the overall good performance of the Central Board of Revenue and the success of government policies . But the government has to consider and revise the policies according to the investment climate. There is still need of adjustment in polices of the government about taxpayers.

The government had fixed the target at 690,000 million rupees for the year 2005-06 out of which it collected 34,601m in July-05, in August it collected 44,924m and 69,700m in September 2005. The government plans to collect 215,400m in the form of direct taxes, 294,000 in the form of indirect sales taxes, 59,400 as indirect excise taxes, 121,200 as indirect custom taxes.

The governmental polices about the taxes show that it is not increasing tax rate but trying to expand the network of tax collection.

Pakistan would be able in near future to reduce its liabilities which are a huge burden on the country in the form of loans. As Pakistan is in the golden period and its economic stability shows the gradual increase in investment, foreign investment and soft loan offering by different organizations.

CBR TAX COLLECTION TARGETS (2005-06)

Target for whole year

215,400

294,000

59,400

121,200

474,600

690,000

Actual at end month:

July-05

7,620

15,740

2,858

8,383

26,981

34,601

August-05

9,015

22,779

4,061

9,069

35,909

44,924

September

28,720

24,466

5,320

11,194

40,980

69,700

Upto September-05

45,355

62,985

12,239

28,646

103,870

149,225

Upto September-04 41,734

50,350

11,230

22,395

83,975

125,709

 

 


NTN, NUMBER OF RETURNS FILED AND MATCHED WITH THE MASTER INDEX. (2004-05)

 

TOTAL NTN ISSUED

TOTAL NUMBER OF RETURN RECEIVED

MATCHED WITH MASTER INDEX

MATCHED WITH MASTER INDEX (%)

Corporate

23,090

12,526

8,290

66.2

AOP

1,287,716

577,770

402,893

69.7

Salary

965,589

535,642

326,540

61.0

Statement

-

104,014

83,913

80.7

Total

2,276,395

1,229,952

821,636

66.8

In fructuous cases

548,587

-

-

-

Live cases

1,727,808

-

-

-

 
 

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