ISLAMABAD: The Federal Board of Revenue (FBR) chairperson Nausheen Javaid Amjad Tuesday said for the first time in history of Pakistan, the government had presented a budget without any taxation measures for 2020-21.
Addressing the Institute of Chartered Accountants of Pakistan (ICAP) post-budget conference 2020, the FBR chairperson who was the guest of honour at the event, said no new taxes had been imposed in the budget.
The objective is to mobilise revenue by keeping a balance for the business community.
There were a lot of expectations of the business community, but we have limited fiscal space.
The budget has focused on documentation measures, broadening the tax-base, simplification of taxes, automation and reduction in cost of doing business.
Unfortunately, the things nosedived after the Covid-19 pandemic. Prior to Covid-19, there was 17 percent growth in the FBR revenue during current fiscal year.
Income tax growth was 18 percent, sales tax growth 25 percent, the Federal Excise Duty (FED) growth 21 percent, and customs growth was -4 percent due to import compression.
For the first time, the growth on imports have shown a minus trend, but domestic Inland Revenue taxes shown handsome growth of 27 percent.
After Covid-19, the FBR is anticipating a growth of only 3-4 percent in revenue during last month of the current fiscal year i.e. June 2020.
“We have sought flexibility from the IMF,” the FBR chairperson said.
Nausheen said the hallmark of the federal budget (2020-21) was to take measures for reducing litigation between the FBR and the taxpayers, revamping of the Alternate Dispute Resolution mechanism and re-introducing the concept of agreed assessment to avoid appeals and courts.
The FBR chairperson said the hallmark of the federal budget (2020-21) was to take measures for reducing litigation between the FBR and taxpayers, revamping of the Alternate Dispute Resolution mechanism and re-introducing the concept of agreed assessment to avoid appeals and courts.
Through these measures taken in the budget, the revenue stuck in courts, and appeals would be recovered through the ADRC.
Nausheen said the ultimate target of the FBR’s point of sale (POS) system was to integrate up to 25,000 retailers with the FBR’s computerised system.
The POS has been installed at the 6,616 retail outlets and the FBR will achieve the target of installing the POS system to 15,000 retailers under Tier-I category.
The FBR chairperson said that the budget had been prepared in unusual circumstances having entirely different dimensions of taxes.
She said the concept of agreed assessment through arbitration by Assessment Oversight Committee, and strengthening Alternate Dispute Resolution mechanism would ensure increase in revenue without going into appeals.
FBR chairperson stated that to strengthen the alternate dispute resolution process, and to make it more taxpayer friendly, it was proposed that the taxpayer was allowed to withdraw his case from any court of law or any appellate authority after a decision of the ADRC. Furthermore, the decision of the ADRC, once it is conveyed by the taxpayer to the tax authorities, is binding upon the tax authorities.
Referring to e-Audit, she said the selection of cases for audit had been revamped.
About refunds, Nausheen said Rs48 billion sales tax refunds had been issued other than FASTER during the current fiscal year.
The FBR chairperson admitted that the payment of income tax refunds was slow, but Rs5 billion income tax refunds had been issued (Rs1 million to Rs5 million claims).
This is subject to the condition that the claims are valid and the IBN has been provided by the taxpayers.
The tax authorities have requested the FBR to provide the IBAN of their bank accounts for receiving refund payment through online system. The FBR chairperson assured the business community that the anomalies in taxes would be removed with the help of two anomaly committees constituted by the FBR.
