ISLAMABAD-The Federal Board of Revenue (FBR) on Tuesday has warned that tax collection would further decline in the ongoing month of April amid slowdown in economic activities due to COVID-19 and reduction in oil prices.
The FBR is already facing mammoth tax collection shortfall of Rs470 billion in nine months (July to March) of the ongoing fiscal year. The tax collection shortfall would further broaden as FBR’s spokesperson Hamid Ateeq Sarwar yesterday said that government would unlikely to achieve the tax collection in April.
He blamed ongoing pandemic COVID-19 and reduction in oil prices for expected shortfall in tax collection. Addressing a press conference, he said that FBR had collected Rs300 billion as income tax during the month of March as against the target of Rs500 billion. However, income tax collection would further decline to Rs200 billion in current month.
He also briefed the media about the government’s incentives given to the people amid ongoing coronavirus pandemic. “Taxes reduced on imports of vegetable oil and pulses to diminish the prices of [food] items,” he said and added that government has also taken measures to reduce the prices of medicines.
The government has also exempted 61 medical items from withholding tax and additional custom duties.
The government is slashing prices for the benefit of common people and that permission to import medical equipment was given according to instructions from the Cabinet, he added. Talking about the incentive package to construction industry, the spokesperson said, “If someone, including builders and [real estate] developers, wished to construct houses, they should inform by December 31 and then they would not be asked about their sources of income”.
However, in doing so, they should ensure they ready their projects by September 30, 2022. He noted that these measures were introduced to provide employment to labour and bolster economic activity in Pakistan. Speaking on the occasion, the member IR (Operations) Seema Shakil said that in order to mitigate impact of outbreak of COVID-19, the Hon. Prime Minister has approved relief package i.e. Rs.70 billion for refunds related to FBR, Rs.30 billion DLTL related to ministry of commerce. Around Rs38 billion and Rs15 billion were released as sales tax and customs refunds, she added.
She informed that the Custom Duty Drawback processing was earlier manual but in order to ensure transparency entire process was made electronically without any human intervention.
She also informed that the IBAN of the taxpayers were updated online and refunds were directly credited automatically to the claimant’s bank accounts.
“We’re in touch with people via email owing to health risks,” she explained, adding that people should contact the FBR by responding to its email to obtain refunds.
Shakil also underlined that updating the IBN would help facilitate refunds, which were being sent directly to people’s bank accounts. Rs2.1 billion worth of refunds — for transaction between Re1 and Rs5 million — would be transferred today (Wednesday), she added.
The FBR board member said the organisation would now focus on the refunds for transactions upwards of Rs5 million.
“We have removed human intervention from our entire process,” she said. Shakil also mentioned that the FBR was encountering problems with regard to the withholding tax from banks. “There were challenges in refunds on electricity and gas bills due to CNICs,” she said.