ISLAMABAD: Federal Board of Revenue (FBR) Chairman Amjed Zubair Tiwana has called an emergency conference of chief commissioners of Large Taxpayer Offices (LTOs), Medium Tax Offices (MTUs), and Corporate Tax Offices (CTOs) next Tuesday to finalise the strategy to meet assigned target of Rs879 billion set for March 2024.
It is learned that the special meeting would focus on a plan to surpass the gigantic target of Rs879 billion during March 2024.
Senior FBR officials informed that if the FBR achieves overall July-March (2023-24) target of Rs6,707 billion, then there is no possibility of additional revenue measures during the current fiscal year. The FBR has surpassed eight-month target of Rs5,829 billion and registered a growth of 30 per cent, but monthly projections for the remaining period (March-June) of 2023-24 would determine the exact decision for taking additional revenue measures during the current fiscal year, FBR officials added.
When contacted, a tax expert stated that import compression, a number of holidays in February 2024, and decrease in number of return filers were among factors responsible for the said revenue shortfall in February 2024. The persistent revenue shortfall in monthly revenue collection of the FBR may force the new government to enforce contingency measures to generate additional revenue of Rs18billion per month during 2023-24, the tax expert added.
The tax collection in February totalled at Rs681 billion against the monthly target of Rs714 billion, resulting in Rs33 billion shortfall. The month of January 2024 witnessed a shortfall of Rs9 billion. The tax collection in March 2024 would determine the exact situation for taking contingency revenue measures in the remaining period of 2023-24.
The proposed contingency revenue measures are: (i) Raise the sales tax rate for textiles and leathers tier-1 from its reduced rate of 15 per cent to the standard rate of 18 per cent, expected collection of Rs1 billion per month.
(ii) Implement a FED of Rs5 per kilogram of sugar, expected collection of Rs8 billion per month.
(iii) Increase advance income tax on import of machinery by one percentage point, expected collection of Rs2 billion per month.
(iv) Increase advance income tax on import of raw materials by industrial undertakings by 0.5 percentage points, expected collection of Rs2 billion per month.
(v) Increase advance income tax on import of raw materials by commercial importers by one percentage point, expected collection of Rs1 billion per month.
(vi) Increase withholding tax on supplies by one percentage, expected collection of Rs1 billion per month.
(vii) Increase withholding tax on services by one percentage point, expected collection of Rs1.5 billion per month.
(viii) Increase withholding tax on contracts by one percentage point, expected collection of Rs1.5 billion per month.
