FBR not solely responsible for reduction in tax collection: PAC body told

Member Customs Federal Board of Revenue (FBR) Mumtaz Haider Rizvi has said that FBR cannot be blamed alone for decrease in revenue collection as performance of large scale manufacturing sector, load shedding and law and order situation have directly impacted revenue collection in 2010-2011.
Giving reasons for current hurdles in revenue collection, FBR Member Customs briefed the special committee of the Public Accounts Committee on Monday that only FBR cannot be blamed for any decrease in revenue collection. The revenue collection is directly linked with the economic growth, he pointed out.
He informed the committee that a huge amount of revenue has been stuck up as cases are in courts and as per PAC directive the FBR will request the courts for early hearing of tax-related cases. There is negative growth in the large scale manufacturing during 2010-2011. If the prices of raw material consumed by local industry come down and law and order situation improves, the overall revenue collection may improve.
At the same time, other factors like load shedding and devastating floods have also impacted the revenue collection during the period under review. It would be appropriate to say that the reduction in revenue collection is due to floods and slowdown in local economic activity. The recent devastating floods have directly impacted overall revenue collection of the FBR. Similarly, if load shedding improves, it would also increase revenue collection due to improved productivity of the large scale manufacturing sector. If the prices of inputs and raw materials reduce, it would also improve production of locally manufactured finished products.
To a query, the FBR Member Strategic Planning and Statistics (SP&S) said an amount of Rs120 billion has been stuck up in the form of arrears at the level of judicial fora. The FBR has requested courts to set-up special benches for early hearing of the cases. The convenor of the special committee of the PAC, Mian Riaz Hussain Pirzada said that the tax reforms have failed to produce the desired results. If the FBR has courage, it should tax the marriage halls of Karachi earning huge amount on daily basis.
The FBR can generate huge income by taxing these marriage halls, but they do not have the courage to do so. Everybody is using political slogan of taxing the framers and land lords, who are already paying provincial taxes. These framers have been forced to pay provincial taxes whenever the government wants to collect the levy. Instead FBR must have the courage to document marriage halls in Karachi which would be instrumental in increasing revenue collection.