Government plans to raise additional revenue of Rs 480 billion
ISLAMABAD: Government plans to secure additional revenue of Rs 480 billion in next budget by removing income tax and sales tax exemptions and improving administrative measures to achieve desired goal by RBF of 5,800 billion rupees.
However, ironically, the administration in the capital of Islamabad has reduced the appraisal rates of properties in the federal capital instead of raising them to bring them back to the same level as market rates.
There will be slight adjustments in major taxes with the aim of streamlining the tax system as the number of salary brackets would be reduced, rental income would be adjusted, two dozen withholding taxes would be abolished, the point machine sales (POS) would be installed in 85,000 branded chains in urban centers with 12 percent for textiles and 14 percent GST for other sectors and the discretionary powers of tax officials would be reduced to restore taxpayer confidence .
According to the budgetary framework agreed with the IMF, the RBF target for the next budget was envisaged at 5.8 trillion rupees based on a revenue collection of 4.7 trillion rupees achieved during the fiscal year. outgoing.
With nominal growth of 13.2%, including a real GDP growth rate of 5% and inflation of 8.2%, RBF revenue could be raised to 5,320.4 billion rupees. Now, the remaining 480 billion rupees will have to be collected by removing tax exemptions, adjusting taxes upward in a few selected cases, such as increasing the tax burden for higher income slabs, rental income and the removal of withholding taxes of about two dozen, thereby reducing the tax burden on the telecommunications sector and reducing tariffs on import tariff lines in the next budget. The government estimated that the removal of income tax and the sales tax exemption would put Rs 140 billion in taxes into the national pot.
When contacted, former FBR chairman Shabbar Zaidi said on Wednesday that it would be difficult for the FBR to raise 4.7 trillion rupees in the outgoing fiscal year and that it could hardly increase from 4.5 trillion to 4.6 trillion rupees. maximum rupees. He said there was an urgent need to ensure the application of the CNIC condition for buyers and that its limit could be increased from 0.5 million rupees to one million rupees. This condition applies to the purchase of Rs100,000 of goods from buyers. The former RBF chairman said removing income tax and sales tax exemptions would result in meager tax collection, but instead of discussing the next budget target, the RBF should focus on achieve the goal of the outgoing exercise.
Official sources said the government also plans to introduce a third-party audit from the next fiscal year. An FBR official called it old wine in a new bottle and said it was an old concept of auditing by accounting firms, which had failed many years ago. years. He was arrested because he had not given the desired results. “If that’s the idea, then it’s like dissolving the revenue agency when you have no confidence in it. There is a need to improve internal controls to ensure that discretionary powers are used judiciously. Who would bother to comply if senior government officials had such low confidence in your tax system? He added that the RBF had all the relevant data and that these facts could be verified before the application of the old ideas.