MINISTER for Finance Senator Muhammad Aurangzeb on Friday said the government was fully digitizing the taxation system to eliminate tax leakages and corruption, increase revenue collection and bring greater transparency to the tax administration. Addressing a representative meeting of the Faisalabad Chamber of Commerce and Industry (FCCI) he said preparations for the next federal budget had begun from Faisalabad, describing the session as part of the government’s pre-budget consultation process rather than post-budget discussions. The Minister said the Finance Division would formulate the next budget, while the Federal Board of Revenue (FBR) would focus on tax administration and revenue collection.
The year-long consultative process on the next budget augurs well for the annual exercise that normally began in April/May when most of the spadework had already been done by the relevant authorities. It was generally believed that the process was a mere formality as the Government neither gave due consideration to input by neither different stakeholders nor properly incorporated suggestions emanating from the law-makers in the two houses of parliament. Separation of the budget-making responsibility of the FBR will ensure that the final document is not based on the idea of squeezing maximum from different segments of the society and might make it more realistic and fair. It was because of the practice to put more and more burden on the existing tax-payers that in the outgoing financial year too, the salaried class paid more income tax than exporters, real estate sector and retailers put together. This highlights a lop-sided approach in budget-making as well as rolling out a series of measures during the year to meet tax collection targets. The Government has fulfilled its promise of lowering tax burden on the salaried class by reducing tax rates for high income employees but no worthwhile measure is in place to make the business community pay their due taxes. A scheme for small traders has been announced but its success is doubtful because of the loopholes and voluntary nature of its application. Proper digitization has the potential to make a difference and in this regard the Minister said that NADRA’s database was being integrated with the FBR system to curb tax-evasion, corruption and revenue leakages. Necessary data and information will be available and it is now for the FBR to utilize it for substantial increase in revenue collection.
