ISLAMABAD: In the wake of emerging challenges on both the economic and financial fronts, a revolutionary taxation system is the need of the hour. In this regard, the Federal Board of Revenue (FBR) is also required to be revolutionized to meet the future revenue collection targets.
Presently, the tax authority is not in a position to meet even the revised tax revenue collection whereas the outgoing government has set a further aggressive revenue collection target of Rs 4,433 billion.
A source at FBR Tuesday told Customs Today that share of the federal government in the revenue collection for the next year was Rs3,000 billion while remaining Rs1,433 billion was of the provinces to meet the current account expenditures of the country.
In result of 18th constitutional amendment, the share of the provinces in the divisible pool had been increased through the NFC Award and it had reduced the resources of the federal government, but the provinces did not accept the liabilities of the federation at the time of devolution of profit earning sectors to the provinces.
“Out of fixed revenue collection target, Rs2200 billion was allocated for the debt servicing whereas Rs 1100 billion for defense services; the aggregate is higher than the revenue share of the federal government, (FBR),” the source said, adding that current account deficit was widening with the passage of every day because of the fact that import bill had crossed the alarming figure of $ 56 billion whereas the exports stood at $ 24 billion; the trade gap was being filled through debt servicing.
“This shows the alarming increase in our expenditures which were higher than our earning; therefore, to bridge the soaring trade deficit, FBR was required to be revolutionized from the least motivated to vigorously pursuing institution with major focus on the operational side rather than on the policy side,” the source said.
“Presently, FBR’s high-ups have been focusing on the policy side; changing tax rates, granting exemptions to specific sectors, tax incentives and others; however, main problem lies in the operational side and this side had been ignored by the previous governments,” the source added.
Therefore, the source said that the caretaker setup especially the finance minister Dr Shamshad Akhtar was required to focus on the operational side of the FBR along with rationalization of the state of current account expenditures of the government departments and officials.
In this regard, the source said that Finance Minister and FBR should focus on the capacity building of both the tax authority and officials by meeting the shortfall of human and infrastructure related shortfalls. In this connection a revolutionary tax system is the need of the hour to meet future economic and financial challenges.
