Taxation measures: revenue impact of Finance Act 2010 to be reviewed

The revenue impact of taxation measures including capital gains tax (CGT) on stock exchanges through Finance Act, 2010 would be reviewed in the upcoming Chief Commissioners' Conference to be held on April 12.
Sources told Business Recorder here on Monday that the revenue measures of Finance Act, 2010 would be analysed to check whether accurate steps were proposed at the start of the budget (2010-2011) for meeting the annual revenue collection target of Rs 1667 billion which has been downward revised to Rs 1600 billion.
The FBR will obtain inputs of Chief Commissioners of Large Taxpayer Units (LTUs) and Regional Tax Offices (RTOs) on capital gains tax on disposal of securities under section 37A of the Income Tax Ordinance 2001, advance tax on transactions in banks or cash withdrawal from banks (section 231AA), withholding tax on purchase of domestic air ticket (section 236B) and Rs 1 per kg withholding tax on transport of goods under (section 234).
The meeting would review the revenue impact of all major budgetary measures announced in budget (2010-2011) for initiation of the budget preparation exercise for net fiscal 2011-2012. The FBR has directed the field formations to regularly monitor the withholding tax deductions on domestic air tickets to check whether the deducted amount has been deposited in the national exchequer for 2010-2011 or not.
Through Finance Act, 2010, a new section 236B was inserted in the Income Tax Ordinance 2001. The new enactment provides for charge of adjustable withholding income tax on purchase of tickets for inland air travel. This tax would be collected @ 5% on gross amount of air ticket for inland travel along with the payment for the air ticket.
The FBR will further analyse whether the FBR has achieved the assigned targets as per revenue generation measures proposed through the Finance Act 2010 or not. Besides, the conference would review the progress on the decisions/recommendations of the last Chief Commissioner Conference. The LTU/RTO wise target for March and collection position as on April 1 would also be discussed during the conference.
Sources said that the important area of discussion would be performance of the Expeditious Refund System (ERS) with particular focus on sales tax refund claims up to Rs 50,000. Other agenda items on the meeting included progress on broadening tax-base as per standing operating procedure (SOP) and data issued by the Directorate General of Broadening the Tax Base.
The FBR will also analyse the current demand created and recovered for income tax, sales tax and federal excise duty, collection out of arrears demand and progress made in cases where arrear demand stuck up in appellate fora and action taken to enforce provisions of Article 199(4a) of the Constitution.
The FBR and the Chief Commissioners had discussed the Article 199(4A) of the Constitution for vacation of stay orders where 6 months have been passed since grant of stays by various courts. It has been observed that the huge amount of arrears demands has been stuck up allegedly due to injunctions by various appellate forums. It has been noted that in most of the cases stay orders granted were beyond the limit of six months as prescribed in Article 199(4A) of the Constitution, but the LTUs as well as the RTOs have not vacated the stay orders. The meeting would review the performance of the field formations in this regard.