FBR hopes to net 700,000 taxpayers, collect Rs70bn

ISLAMABAD: The tax machinery has prepared a plan for collecting at least Rs70 billion next year from 700,000 wealthy people who contribute nothing to the national exchequer, according to Federal Board of Revenue’s Chairman Salman Siddique.

Answering questions at the post-budget press conference on Saturday, he said that implementation of the plan coupled with some administrative measures would enable the tax machinery to achieve the ambitious target of collecting Rs1,952 billion.

The government has identified 2.3 million people living in posh areas who don’t have national tax numbers. Federal Finance Minister Hafeez Shaikh has said these people live in posh areas, have more than two foreign currency accounts and travel abroad every year but don’t pay any tax.

The FBR chief said notices would be issued to all such people and efforts would be made to collect income tax from them. “I can even go to the extent of filing cases with the National Accountability Bureau against those not prepared to pay their taxes,” he said.

The revenue target for next year is 23 per cent higher than the revised target of Rs1,588 billion for 2010-11.

Mr Siddique said the government would get a windfall of Rs260 billion on account of 16.5 per cent increase in GDP (12 per cent inflation and 4.5 per cent growth) next year.

He said the GST measures announced in March for four months would remain imposed for the entire year, yielding an additional Rs104 billion. This does not include new GST taxation measures worth over Rs31 billion.

The chairman said the FBR would raise more than Rs50 billion through administrative measures. There will be a centralised audit system from July to identify potential taxpayers.

Mr Siddique said a demand of Rs25 billion had been made from withholding agents who had collected under-declared income tax from taxpayers. Wrong input tax adjustment of Rs26 billion has been detected. “We have collected only Rs1 billion of

this.”

He said Rs131 billion was stuck in appeals in various courts. “We also hope to collect a substantial amount from the settlement of these cases next year.”

Mr Siddique said the revenue target was likely to be surpassed easily. He said the Rs1,588 billion target for the current year would be met by the end of the month.

The finance minister announced that the Federal Excise Duty would be eliminated over the next two years and there would be only two types of taxes: income tax and sales tax under the inland revenue tax and customs duty.