KARACHI: Federal Board of Revenue (FBR) is committed to broaden the tax net and plug revenue leakage, Chairman FBR Nisar Mohammad Khan and he has initiated several exercises in this regard.
Since the voluntary tax compliance scheme failed to yield result and people were not convinced to comply voluntarily, the FBR decides to bracket the tax evaders the hard way.
DG Inland Revenue I&I Khawaja Tanvir is taking high net-worth individuals to task while Customs is making significant progress in the anti-smuggling campaign.
Moreover, DG I&I of Inland Revenue is also checking into the duty and tax concessions under various SROs including SRO 1125.
The official said several SROs particularly SRO NO.1125/2011 provides duty/tax concessions on import of raw material by registered manufacturers adding that the said SRO was widely been misused causing loss of revenue.
A number of commercial importers have got themselves registered with Inland Revenue as manufacturers to claim inadmissible concessions in SRO 1125/2011. Customs has to rely on IRS documentation. Khawaja Tanvir is basically a Customs group officer and is well aware of the affairs of both Customs and Inland Revenue and it is expected the ambit of said SRO might be limited further, which could result in significant addition in the revenue collection.
Moreover, the minimum rate of customs duty was increased from zero percent to 1.0 percent in the last budget, it may be increased further.
Similarly, several income tax exemptions and concessions may also be withdrawn. Currently Part I of the Second schedule of Income Tax Ordinance 2001 consists of various exemptions.
These exemptions have been granted on the basis of specific entity, nature of income, geographical source of income and other related function.
Several duty and tax exemptions on import stage are likely to be withdrawn allowed through various statutory regulatory orders (SROs), an official said.
The Federal Board of Revenue (FBR) has started budget exercises and is considering to withdraw various exemptions in the budget 2016/2017 to create equality in the system.
Experts in the past already suggested revisiting allowed exemptions that should be in line with the government economic policy, four cannons of taxation and primarily which helps in generation of business activity, employment and well-being of the society.