LTUs, RTOs directed to overcome revenue shortfall

Chairman FBR/Secretary Revenue Division Dr Muhammad Irshad Wednesday directed chief commissioners of Large Taxpayer Units (LTUs) and regional tax offices (RTOs) to overcome revenue shortfall by expediting cases involving Rs 300 billion stuck up in different courts, including Supreme Court of Pakistan and high courts.
Sources told Business Recorder here on Wednesday that the Chairman FBR prioritised areas for achievement of the assigned revenue collection target for 2016-17. The revenue shortfall must be overcome through administrative and enforcement measures. The first area is to speedup recovery of taxes from cases under litigation at various judicial fora. The amount involve over Rs 300 billion under litigation including cases where stay has been granted and are still pending in courts. The vacation of stay orders at the level judicial fora would be instrumental in achievement of the assigned revenue collection targets for the current fiscal year.
It was noted that a huge number of cases are pending in courts involving huge amount of revenue which requires a comprehensive strategy by each RTO/LTU to liquidate pendency and recovery of the unpaid duties and taxes. The representation of FBR cases at higher judicial forums is weak and not up to the mark. Moreover, a number of cases are pending involving considerable amount of revenue which requires to formulate a coherent strategy by each RTO/LTU in order to liquidate this pendency and realise the due/legitimate revenue of the state.
An FBR instruction being drafted on the same issue said: An amount of Rs 310 billion is stuck up ay different appellate forums. As the FBR has been entered into the third quarter of financial year, and if the amount has been liquidated, it would play a pivotal role in achieving the revenue targets for 2016-17. Each field formation should focus on top 50 cases in which stay has been granted and are still pending in courts, sources said.
The possible increase in sales tax and withholding tax on imports in the remaining period of 2016-17 would also increase overall collection during the period under review. Another idea discussed during the video conferencing was out of court settlement and ADRCs mechanism. Charman FBR directed field formations to approach taxpayers and tax lawyers to resolve disputes under the out of court settlement mechanism.
According to the sources, the chairman FBR further directed chief commissioners of LTUs and RTOs that the second major area to be focused is the completion of pending audit. A number of cases have been selected by the field formations for audit which are still pending. The demand created through audit and speedy recovery of the same can also generate additional revenue, sources added.
During the video conferencing, the FBR chairman has also directed the chief commissioners of LTUs and RTOs to focus on broadening the tax base for discovering new taxpayers. For this purpose, the field formations should use software like "Strive" etc. Tax authorities highlighted that the broadening of tax base is a weak area and except RTO Multan and RTO Gujranwala, the remaining RTOs should improve performance.
Dr Muhammad Irshad also directed the chief commissioners of LTUs and RTOs to take matters of Public Accounts Committee (PAC) seriously to avoid embarrassment at the meetings of the PAC. The FBR chairman further directed chief commissioners of LTUs and RTOs to focus on sales tax collection on domestic stage (local stage) to improve overall IR collection, sources added.