ISLAMABAD: Federal Board of Revenue (FBR) Chairman Muhammad Javed Ghani held separate meetings with Prime Minister Imran Khan and his adviser on finance Dr Hafeez Shaikh on Tuesday to discuss measures to be taken to achieve revenue target for the current fiscal year, and to bring about reforms in the tax administration. Sources told Business Recorder that the FBR Chairman, Ghani, also discussed ways and means to achieve the challenging revenue collection target for 2020-2021, reforms in tax administration, documentation drive, and administrative/enforcement measures to increase return filers, and generate additional revenue.
Sources said the new chairman FBR met with the adviser on finance Dr Hafeez Shaikh, and shared his thoughts about how he wanted to move ahead with four points from simplification of tax collection, automation, and increasing points of sales (PoS).
The adviser, according to sources, emphasized that there should be no harassment, and wanted to know from where the revenue would be mobilised as current fiscal year might not be different from the last fiscal year given the impact of COVID-19 on economic activity in the county and low growth trajectory. The official said he also wanted timely payment of refunds to help exporters increase their exports.
The government has set tax collection target of Rs4.963 trillion for the 2020-21 fiscal year, and a senior official of the finance ministry on condition of anonymity said even in their (the Finance Division's) view the next fiscal year's target is very ambitious but added that they would make every effort to get as close as possible.
The FBR revenue collection target is Rs1 trillion higher for the next fiscal year over provisional revenue collection of fiscal year 2019-2020, he added.
The tax authorities are confident about achieving the revenue collection target of Rs960 billion, set for the first quarter (July-September) of 2020-2021, and likely resumption of economic activity by October, would pave the way for meeting annual tax projections.
The first three months' projection trends show expected collection of Rs250 billion in July 2020, Rs250 billion in August, and Rs350 billion in September 2020.
During the first quarter of 2020-2021, it is estimated that the FBR would be able to collect Rs850 billion. However, more efforts would be required to move from Rs850 billion to Rs960 billion by the end of first quarter of 2020-2021.
Ideally, the FBR had to collect around Rs1,200 billion in each quarter of the new fiscal year.
The FBR is hopeful that the economic situation would improve in October 2020, and consequently revenue collection position would also improve in the second quarter of 2020-2021.
The FBR officials informed the committee that the FBR had suffered a shortfall of Rs800 billion due to the Covid-19 impact on economy and lockdown in the country.
If the situation improves by October 2020, the FBR would be in a position to meet the assigned revenue collection target of Rs4,963 billion for 2020-2021.
Copyright Business Recorder, 2020