The Central Board of Revenue (CBR) is likely to collect Rs 35 billion in the first month of the fiscal 2005-06 against Rs 30.8 billion collected in the same period last year. It is expected that the CBR will generate the amount in July 2005 keeping in view the past trend of revenue collections in the initial months of fiscal years.
In July last, the CBR provisionally collected Rs 28.6 billion against Rs 23.4 billion in July 2003-04, showing an increase of 22.2 percent. The final figure of July 2004-05 was Rs 30.8 billion after compilation of data.
Official sources told Business Recorder that the start of the new financial year seems to be very positive as CBR drive for refunds and rebates payment would continue in 2005-06, excluding zero-rated sectors. However, zero-rating of five major sectors will have no revenue implications on the overall revenue collection in fiscal 2005-06.
They said that the government would achieve an ambitious target of Rs 690 billion in fiscal 2005-06 through broadening of tax-base, simplification of law, strengthening of economy, keeping in view the growth target. The ultimate goal of the CBR is to enhance tax-to-GDP ratio through broadening tax base.
On the sales tax side, they said that collectors of sales tax would identify potential taxpayers operating in major cities with the help of the income tax department and the trade associations. The sales tax collection will play a key-role in meeting the overall revenue target of Rs 690 billion.
Through a liberal sales tax policy, the CBR has given major sales tax concessions, including zero-rating to major sectors in Budget 2005-06. Now the target could only be achieved through concerted efforts for broadening the tax-base, and voluntary compliance by the business community, while focus will be on the major revenue spinners particularly POL products, telecommunications, electric energy, natural gas, cotton yarn, cement and service-providers. The revenue will also be generated through recovery of arrears, disposal of cases and focus on the services sector.
As far as the collection of customs duty is concerned, sources said the increase in the volume of imports would ultimately increase customs duty collection. If the economy continues to move in a positive direction and budgetary measures are implemented properly, the CBR is likely to achieve the target of 2005-06 with special focus on plugging loopholes and leakages. In this connection, the CBR is particularly focusing on measures to check under-invoicing and mis-declarations.
Special teams would be constituted in the field offices, to discover new income taxpayers, for broadening of the tax-base, the sources added.
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