ISLAMABAD: The Federal Board of Revenue (FBR), Tuesday, presented a plan before the Ministry of Finance to improve domestic compliance/ enforcement and reduce gaps to compensate expected revenue shortfall in tax collection from the import stage in the coming months.
It is learnt that Finance Minister Dr Shamshad Akhtar held a meeting with the FBR officials at the Finance Division, here on Tuesday.
The meeting primarily focused on identification of areas including audit for improving tax collection to meet the overall revenue collection target of Rs9.4 trillion set for 2023-24. The tax authorities gave a presentation to the finance minister on the alternate measures and strategy to improve domestic collection to overcome shortfall of import taxes projected in the coming months.
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The imports are expected to shrink in the next few months which require an alternate strategy to meet the annual target of Rs9.4 trillion. To tackle this problem, the FBR will reduce the compliance gaps in areas where needed. Nearly 50 per cent of the revenue comes from the import stage and 50 per cent from domestic taxes.
At the time of budget (2023-24), it was assumed that 32 per cent growth would be witnessed in tax collection from the import stage. The growth in import taxes is not more than 12 per cent under the present circumstances.
Therefore, an alternate plan has been shared with the Ministry of Finance to reduce compliance gaps in withholding tax collection and other taxes. Moreover, the FBR would intensify enforcement efforts to generate revenue from those tobacco units which are evading sales tax and the federal excise duty.
On the sales tax side, tax frauds would be effectively checked by controlling the business of fake and flying invoices. The wrong adjustment of input tax would be checked, they said.
The leakages in the withholding taxes would also be checked through strict enforcement and monitoring of withholding agents.
Copyright Business Recorder, 2023
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