IMF team meets tax officials
A team of International Monetary Fund (IMF) Friday visited Federal Board of Revenue (FBR) headquarters and met tax authorities to discuss different issues including reforms and taxation system of Pakistan. It is reliably learnt that the IMF team led by Resident Chief in Pakistan held a detailed meeting with the FBR team of tax managers. The FBR discussed potential areas of technical assistance (TA) for the coming year in the areas of tax and customs policy and administration, sources added.
Meanwhile, the FBR is examining various options for imposing different rates of 5 to 10 percent Federal Excise Duty (FED) on usage of cellular phones in the upcoming ‘mini-budget.’ In case any such proposal is accepted, this would be a major revenue generation measure for 2018-19.
According to sources, the government is mulling over different proposals to increase revenue collection, as the FBR is facing massive shortfall of over Rs 160 billion in first six months of the current fiscal year. The FBR is facing an uphill task to achieve the downward revised revenue collection target of Rs 4,398 billion. Now the government is planning adjustments in taxes with the intention to increase revenue collection target to Rs 4,450 billion for the financial year 2018-19.
The suspension of collection of Withholding Tax from mobile subscribers had caused huge losses to both the FBR at federal level and provincial revenue collection authorities at provincial level.
Sources said now the FBR is examining alternate options to impose FED on mobile usage. The FBR is examining a proposal that the possible taxation rate may be around 5 to 10 percent on different level of usage. The government is also exploring whether the FBR can differentiate between filers and non-filers as far as FED is concerned. But it is not yet known how the FBR will be able to ascertain whether or not the users’ earnings are more than taxable limit of Rs 400,000 per annum.
The FBR is also considering increasing tax rates on imported luxury cars with capacity of 1600cc in the upcoming ‘mini-budget’. The FBR also plans to withdraw tax some incentives announced by the last PML-N-led government.