Central Board of Revenue (CBR) net collection amounted to Rs 550 billion in current fiscal year 2004-05 up to June 27, against the target of Rs 590 billion, and it has to collect Rs 40 billion in the following three days to meet the year''s target. According to data compiled on Monday, provisional figure of collection for June, 2005, had reached Rs 50 billion, against the target of Rs 89.456 billion. Another Rs 39.456 billion is required to achieve the target of Rs 590 billion by June 30.
Official sources told Business Recorder that it was not a difficult task to collect Rs 39.5 billion in the remaining three days. They said that last year, CBR had easily collected over Rs 30 billion in the last 3-4 days. Keeping this trend in view, the tax machinery might be able to collect Rs 35-40 billion in the last few days of the current fiscal year.
There has been slight change in the pattern of revenue collection this year due to different taxation measures taken, but there is no doubt about surpassing the target by June 30, 2005, they added.
They said that CBR gross revenue collection had crossed Rs 650 billion, against the target of Rs 590 billion. However, the amount refunded to the exporters is not included in the ''net'' revenue collection. The CBR has paid a huge amount of Rs 95 billion as refund and rebate in July-May period of current fiscal year, which is not included in the ''net'' revenue collection figure. Similarly, the refund amount paid in June 2005 is also not mentioned in the monthly net collection of Rs 50 billion.
Officials said that CBR initially collects the amount, which is later refunded to the business community. But CBR performance is judged on the basis of ''net'' revenue collection, whereas it should be on the basis of gross collection. The gross revenue collection actually reflects the performance of the tax machinery, as the business community obtains refunds as part of regular business activity. Every year, the CBR informs the Ministry of Finance about its total actual revenue collection deducting refund and rebates. However, if CBR performance is examined on the basis of gross collection, the CBR has already achieved the target of Rs 590 billion. "Nobody can deny that the amount refunded had been actually collected by the tax machinery, in the first stage", officials added.
The CBR will soon start an exercise to examine the international trends to judge revenue collection performance of various countries. If the performance of tax collecting authorities of different countries is judged on the basis of gross revenue collection, the CBR will propose to the government to analyse CBR performance on the same criterion.
Commenting on the impact of zero-rating of sales tax for textile and other sectors on revenue collection, officials said that zero-rating of sales tax would help in increasing revenue collection because the liquidity position of export industries would substantially improve. This would increase economic activity ultimately resulting in increase in revenue generation due to better liquidity position.
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