BUSINESS-FRIENDLY CBR

The new chairman of CBR is determined to achieve the high target

From SHAMIM AHMED RIZVI,
 Islamabad

Aug 16 - 22, 2004

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 the country.

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 firmly said.

"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.