Interim Finance Minister Dr. Shamshad Akhtar has called on the Federal Board of Revenue (FBR) to present its plan for achieving the set annual revenue target of Rs. 9.4 trillion. During a high-level meeting chaired by the minister and attended by government and FBR officials, the FBR identified five areas to address a significant Rs. 1 trillion revenue gap.
- Withholding Taxes: The FBR found that withholding taxes collected by agents were not being properly entered into the tax net. Effective monitoring of withholding taxes could potentially increase tax revenues by up to Rs. 200 billion in the current fiscal year.
- Tax Avoidance in the Cigarette Industry: The FBR identified issues with tax avoidance in the cigarette industry. Some companies, including the Pakistan Tobacco Company (PTC), Philip Morris Pakistan (PMI), and Khyber Tobacco, have implemented the Track and Trace System. However, the Track and Trace system is still a work in progress, and the FBR believes that stricter measures could lead to an additional tax collection of Rs. 50 billion from the tobacco sector.
- Smuggling Prevention: The FBR highlighted the need to prevent smuggling of foreign currency and other commodities through Afghanistan and Iran.
- Detection and Legal Action Against Sales Tax Fraud: Another area of focus for the FBR is the detection and legal action against sales tax fraud.
- Import Valuation: The FBR suggested that proper assessment of commodities imported from other countries could significantly increase tax collection.
These measures are part of the FBR’s strategy to bridge the revenue gap and achieve the annual revenue target.