Rs 1,590 billion gross figure released mistakenly: FBR

The Federal Board of Revenue Member Strategic Planning and Statistics, Mahmood Alam has admitted before the Public Accounts Committee that the FBR has mistakenly reported gross revenue collection figure of Rs 1,590 billion on June 30, 2011 instead of actual net collection of Rs 1,550 billion for 2010-11. During the PAC special committee-II proceedings here on Tuesday, Mahmood Alam informed the committee that final reconciled revenue collection figure is Rs 1550 billion for 2010-11.
This is net revenue collection figure of the FBR for the period under review. "I am giving stated position on the behalf of FBR that we have mistakenly given the gross figure of Rs 1590 billion on June 30, 2011. Around Rs 40 billion of refunds were not excluded from the gross revenue collection figure of Rs 1590 billion during 2010-2011. After exclusion of refunds from gross revenue collection figure of Rs 1590 billion, the net revenue collection is Rs 1550 billion. It is general practice that net figures have always been reported, but happened mistakenly," the FBR Member clarified.
Responding to a question on figure fudging, FBR Member categorically stated that there is no chance of figure fudging as the revenue collection is duly reconciled and verified with the State Bank of Pakistan (SBP). All the payments and tax payment challans are duly verified with the SBP and there is no possibility of any kind of figure fudging due to foolproof system of reconciliation. However, mistake has been committed and we are internally checking that at which level such thing has happened.
Mahmood Alam further informed the committee that exact amount of total net tax collection is Rs 1550 billion for 2010-2011 and Rs 1590 billion was shown a total gross amount. It was mistake done at primary level without any intention to fudging the actual figure. However, PAC was of the view that it is admitted that figure of the FBR was not credible. And if it is accepted then the whole figure or process of budget making was based on wrong assumption. Zahid Hamid, who chaired by the committee, claimed that FBR misguide the whole parliament because budget was made on these assumptions. He said policy decisions mainly depends on these figures and if these are wrong then every things went wrong. Due to wrong reporting of figures, the budget figures were also changed.
Zahid Hamid stated that the FBR should use IT tools like automation to avoid such mistakes in future. Such wrong reporting of figures also has impact on the negotiations with the donor agencies. About the advance tax, FBR Member added that in June 2011 no advance tax has been accounted for.
The PAC also expressed displeasure, irritation over no-response of audit observations worth Rs 16.369 billion by the FBR and directed to complete inquiries within one month. These audit paras included Rs 10.508 billion, for which the FBR provide no reply. These observations related only to FBR indirect taxes and expenditure audit.
Responding to a query, FBR Member requested the committee that these inquiries/recoveries should be waive off because it required spending of government resources and time of the FBR officials. These are 12 years old inquiries and mostly related to those officials/companies who either died/retired or wound up their business entities. Responding to the FBR request, the PAC and officials of Auditor General insisted to further proceed for completion of inquiries.
Zahid Hamid stated that it is mockery with PAC that FBR senior officials could not respond to the members' queries and come here without proper preparation. He said if the FBR senior officials hold the DAC meeting properly, then most of the audit paras might be resolved there. The committee regretted that the FBR admitted audit paras relating to Rs 4.237 billion but no action was taken to recover the amount. The committee was informed that Rs 26.662 million amount observations record was not provided to the audit.
The audit officials informed the committee that a large number of FBR inquiries were pending and could not be resolved at the Departmental Audit Committee (DAC) level. Senior officials of the FBR including its chairman could not attend the DAC, therefore, not a single audit para was resolved there. The PAC also expressed their resentments over the delay of inquiries for twelve years as the above figure related for the year 1998-99.
The Audit officials also highlighted observations in FBR accounts for the year 2003-04 (in Revenue Receipts) worth Rs 5.644 billion, in which FBR admitted Rs 2.425 billion yet to be recovered. The PAC also expressed displeasure over audit observations worth Rs 2.086 billion (Direct Taxes) for the year 2004-05, 2006-07, and 2007-08.
The PAC also discussed several audit paras relating to grants taken by the FBR and at the end of year could not surrender the saved amount in time. The PAC directed the FBR that in future no grant should be taken, which later on showed as saving in the account. The PAC asked them to return the saved amount by May 15 every year.