IT is heartening to see Federal Board of Revenue (FBR) taking a good start of the new fiscal year by collecting Rs 410 billion during the first month as against the monthly target of Rs 341.7 billion.
Prime Minister Imran Khan also took to his twitter to commend the revenue body’s performance of collecting highest ever revenue for the month of July.
FBR appears to be focused to enhance revenue collection, which indeed is imperative to take the country towards self-reliance. However, the focus needs to be shifted from import related and indirect taxes to direct taxes.
Out of the Rs 410 billion, Rs 210 was collected at the import stage, which is equal to 51.3 percent of the total monthly collection.
This heavy reliance on import taxes and duties may cause inflation in the country, as taxes paid at the import stage are usually recovered by increasing prices.
These import taxes are also causing an increase in prices of electricity and petroleum products.
In addition, heavy reliance on imports also creates a problem of balance of payments and this is the reason we have to frequently knock at the doors of world financial institutions especially the IMF for stability of our foreign exchange reserves.
While enhancing our exports substantially to address the issue of balance of payment, time has come to bring a change in tax collection culture.
An ambitious target of Rs 5.8 trillion has been set for current fiscal year and the revenue body will have to look out of box to meet this target, ensuring also that there is no extra burden on common man.
Both the FBR and the NADRA have requisite data to reach people not paying their taxes honestly. These people must be brought to the tax net.
An effort was made to bring millions of shopkeepers into the tax net when Shabbar Zaidi was Chairman, FBR but he faced stiff resistance and these retailers and traders also resorted to strikes.
We will suggest the government to sit with traders’ bodies in order to reach a mechanism where these shopkeepers could also be lured into tax net. The process must be completed in an amicable manner but without any further delay.