Now revenue leakages come under govt focus

ISLAMABAD: Finance Minister Muhammad Aurangzeb has said that the government is taking efforts to plug the revenue leakages.

Sources told Business Recorder that speaking at the Overseas Investors Chamber of Commerce and Industry here the other day, Finance Minister Aurangzeb reiterated the government’s commitment to boost trade and investment and stop leakages in the revenue system.

He shared that the government is taking all necessary steps to digitalise the revenue structure, bring transparency and client friendliness, and reduce leakages. In this regard he pointed out to significant difference between sales tax adjustments being claimed by different companies, quoting the example of beverage sector.

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The finance minister highlighted that the tax authorities would use data analytics to identify potential tax frauds. He shared that the government already had the income and sales tax data of companies sorted by sectors.

The minister again quoted the example of the beverage sector where there was significant difference between sales tax adjustments claimed by different companies. In the beverage sector, the benchmark tax adjustment rate has been set at 7%, by The Coca-Cola Company, but other companies claimed up to 20%, FBR Chairman had shared in a press conference earlier in October 2024, sources added.

FBR Chairman also shared the FBR’s study of the 16 active cases engaged in the manufacturing of aerated water, representing 99% of the total reported sales of aerated waters revealed that some of these cases had claimed excess input tax adjustment of Rs15 billion in fiscal year (2023-2024) as compared to industrial benchmark of the sector. “The major source of fake and dubious input tax is claimed on the purchase of sugar, plastics and services,” FBR study added.

Copyright Business Recorder, 2024