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Haroon Akhtar Khan is likely to be appointed as Special Assistant to Prime Minister on Revenue and a notification in this regard is expected to be issued within this week. According to sources, the Special Assistant to Prime Minister on Revenue would primarily focus on key areas/sectors which have proven to be major revenue spinners in the past and have been showing a negative growth in revenue collection during 2019-20.

Last week, Haroon Akhtar Khan reportedly gave a presentation to Prime Minister Imran Khan on Federal Board of Revenue's (FBR's) performance and measures to improve revenue collection, tax reforms/restructuring of the Board.

Sources told this newspaper that, "once the reporting line of the SAPM on Revenue has been clarified the notification of Haroon Akhtar Khan's appointment will be issued followed by the appointment of a new Chairman FBR in the case the incumbent FBR chairman Shabbar Zaidi tenders his resignation on health grounds.

FBR Members showing satisfactory performance are not likely to be changed; however transfers and/or postings would be made only after budget 2020-21, if required.

Sources said that SAPM on Revenue will review tax polices and ascertain reasons for lower revenue collections in 2019-20 from those sectors that were showing a positive growth in revenue collection in 2018-19; for example, withholding taxes and imports. The tax policy would also be reviewed to raise taxes from these two major sources of revenue.

To further enhance revenue the following measures are currently under consideration by the Khan administration:

(i) Major changes in the Directorate General Customs Intelligence - a directorate charged with failure to check massive smuggling in the country - are under consideration.

(ii) Customs duties, regulatory duties and additional customs duties (ADCs) would be reduced to check smuggling. The National Tariff Commission under the Ministry of commerce currently deals with customs tariff in consultation with the FBR.

(iii) Heavy taxation on the real estate sector has resulted in total cessation of buying and selling of immovable properties. Taxes and market values of immovable properties would be reviewed.

(iv) Incidence of tax on the salaried class would be reviewed.

(v) One of the major revenue spinners (cigarettes) has shown nominal growth in revenue collection due to rise in FED on cigarettes. There is a need to review the existing structure of FED on cigarettes.

(vi) Increase in sales tax from 8 to 17 percent on sugar and FED from 11.5 to 14 percent on beverages needs to be revisited.

(vii) Existing tax rates on profits on debt and rental income will be reviewed.

(viii) The government needs to vacate stay order granted by the Islamabad High Court against implementation of the track and trace system on cigarettes. Track and trace will also be implemented for monitoring and clearance of excisable goods like fertilizers, beverages, sugar and cement sectors.

(ix) Review of the policy of payment of income tax refunds to control speed money in the field formations.

(x) The FBR had directed the field formations that there would be no bank account attachment unless a taxpayer's chief executive officer/owner is informed at least 24 hours prior to attachment and the approval of the chairman FBR is obtained. This directive is hampering field formations' performance and needs to be withdrawn.

Copyright Business Recorder, 2020