ISLAMABAD The ongoing war against terrorism, especially ongoing operation Rah-e-Nijat in South Waziristan Agency, might cost the government more than allocations in the budget 2009-10, thus necessitating additional tax measures. This transpired from Chairman Federal Board of Revenue (FBR) Sohail Ahmeds panel interview with TheNation/Nawa-i-Waqt. Certain contingency measures required at the current juncture of time were not known at the time of the budget 2009-10, he said referring to the war on terror. Therefore, the government might need extra revenue for which it would have to take additional tax measures, he observed. However, the Chairman FBR rushed to add that there were bright chances of the foreign financial assistance arriving in time (within this financial year). In that case, he added, no additional tax measures would be required. If needed, the FBR would propose such additional tax measures that would not affect the poor and the lower income strata of the society, said the Chairman. When asked how much additional tax revenue would be required, the Chairman said it was not his domain to estimate. We would ask to Government to take certain tax measures only if the government would require the FBR to collect revenue beyond the annual target for the current financial year, he said. Otherwise, according to Chairman FBR, the annual revenue target for the current financial year would remain at Rs. 1,380 billion. Explaining the other figure of Rs. 1,396 billion, he said it was International Monetary Funds assessment that the Government might need collection of, at least, Rs. 16 billion additional tax revenue. According to the Chairman, the FBR was working with the international financial institutions over the draft law for the value added tax (VAT). My team is already in Dubai discussing technicalities and modalities of the VAT law draft and I would join them on Monday, he said. The deadline for finalisation of the draft was December 2009. The government would table the draft in the form of a bill in the National Assembly that would have six months for the legislation process. The Government has already committed with the IMF and the World Bank to impose the VAT in place of General Sales Tax (GST) from July 2010. It is up to the Parliament to decide about the tax rates and exemptions. Chairman FBR was of the view that steadfast implementation of the VAT could jack up the tax to GDP ratio by three to four percent within the period of three to five years. That means collection of up to Rs. 400 billion revenue from the VAT in a year, he added. Asked about the random audit of 5 percent to check about the tax evasion, he said the FBR auditors have caught some business and media groups which were evading taxes. About the ongoing tax administration reform project, he said he as Chairman had facilitated the Customs and Excise Group officers and had even offered postings in the Inland Revenue Service on their choice. We are even working on giving them certain guarantees of their seniority protection and accordingly promotions in the post-reforms structure of the tax administration, he added. According to Chairman FBR, the reforms were aimed at integrating the tax collection and harmonising the tax laws without hurting any service or occupational group of the civil servants. He said even after creation of the Inland Revenue Service, the Customs would remain as an occupational group in the basic recruitment through the competitive examination.