ISLAMABAD - The International Monetary Fund on Monday questioned the tax policy of the government, which has failed to enhance income tax returns despite giving many extensions in the last dates for filing returns.
The visiting IMF Post Programme Monitoring Mission has visited Federal Board of Revenue. Meanwhile, Special Assistant to Prime Minister on Revenue Haroon Akhtar Khan held a meeting with IMF's Mission regarding tax policy/administration issues. Chairman FBR Tariq Mahmood Pasha and members of the FBR were also present in the meeting held at the FBR House.
Sources informed that FBR briefed the visiting delegation on the revenue collection and government’s policy on broadening the tax base of the country. The FBR achieved provisional net revenue collection of over Rs 270 billion for the month of November, 2017 by recording an increase of around 24% over the revenue collected during the corresponding month of last fiscal year. Provisional net revenue collection was recorded as Rs. 1302 billion for the first five months of the fiscal year with an increase of around 19.55% over the net revenue collected during the same period of last fiscal year. During fiscal year 2016-17, the collection for the first five months stood at 1089 billion.
The FBR also briefed the Fund on the number of income tax returns. A total of 991,187 returns have been received by November 30, 2017 as against 746,022 returns received up to November 30, 2017. However, the government has given several extensions.
The Fund questioned Pakistan’s decision to impose heavy regulatory duty on imports. Finger lauded the efforts of the government, appreciating the healthy economic growth shown by Pakistan. Finger was appreciative of the momentum that was built last year and which has continued in this financial year also as indicated by sustained economic growth. The delegate specifically acknowledged the growth in revenue shown by FBR. Finger recognized that such growth was remarkable as last year FBR had experienced revenue dip due to the tax concessions offered in agricultural package, zero-rating of inputs of five export oriented sectors and the government's decision of not passing on the effect of increase in POL prices.
Haroon Akhtar pointed out the numerous policy as well as operational initiatives taken by FBR to create deterrence against tax evasion and avoidance. In this regard, Finger appreciated FBR's role in introducing legislation such as Benami Act, its Anti-Smuggling and Anti Money Laundering operations. Finger appreciated the increase in number of tax filers and further emphasized the need to optimally utilize available third party data for bringing more people in the tax net. At the same time, Finger also stressed the need to make concerted effort to take on policy issues to plug leakages and create more avenues for revenue collection. Finger also highlighted the simultaneous need for taxpayer facilitation, building trust and creation of tax culture along with revenue generating measures. He also pointed out the need to create coordination of federal and provincial revenue authorities and to harmonize processes.
Meanwhile, Special Assistant to Prime Minister on Revenue Haroon Akhtar Khan held a separate meeting with a team from World Bank at the FBR House. Chairman FBR Tariq Mahmood Pasha and members of the FBR were also present.