IT IS really heartening to see the Federal Board of Revenue(FBR) surpassing its seven month collection target by Rs 17 billion as it collected Rs 2, 568 billion against the target of Rs 2, 551 billion. The monthly target of the FBR for January 2021 was Rs341 billion while it collected Rs363 billion, crossing the target by Rs22 billion.
Over the last few months, the economic indicators are on positive trajectory and its impact has now also started to appear on the revenue collection. However, given the fact that our people are not good tax payers, surpassing the tax collection also indicates the hard work of the FBR officials, for which they must be appreciated and encouraged so that the current trend continues in the future as well. The revenue target of Rs 4,963 was set for the current fiscal year and this means that the FBR will now have to collect another Rs 2, 395 in the remaining five months. In our view, this will not be a big task as the revenue collection increases especially in the last few months of the financial year. However, the efforts for unleashing the country’s true tax potential must continue and with much more vigour as it is the only way through which we can achieve self-reliance and spend more on the development projects. With the world’s fifth largest population only 1% of the population unfortunately is registered for tax. According to the world’s financial institutions, the country’s tax collection is sixty two percent below than its potential. Tax exemptions or concessions should be done away with. Instead of granting exemptions, the government should collect due taxes and then provide subsidies/incentives where it wants to promote any specific sector. Besides simplifying the procedures, tax rates also should be reduced to encourage the people pay their taxes honestly. In the first six months of current fiscal, refunds to the tune of Rs102 billion were issued compared to Rs53 billion for the same period last year. This significant increase in the issuance of refunds will really help the businesses to further expand their operations. The more FBR will facilitate the business community, the more it will get in return.