The country is going through economic recovery and its sustainability will largely depend on efficient revenue mobilization. These few years are the peak debt servicing years for Pakistan. FBR needs to work on a war footing to achieve the target of RS 13 Trillion and cannot falter on a single rupee. However unless the foot soldier of FBR has the mobility to cover the field, the target would remain a daunting task. FBR faced a staggering Tax Gap of PKR 6 trillion during 23-2024 out of which approximately PKR 3.5 Tax gap is attributed to the sales tax gap.
Further, there is a significant challenge related to no registration and fraudulent registration in sales tax systems. Out of approximately 260,000 manufacturers who should be paying sales tax, only 42,000, are registered with FBR even those that registered are not fully compliant, FBR also faces is significant gap in its tax base.
Only around three million people file income tax returns (non-null tax returns). to improve the situation, are robust transformation plan was developed to make FBR a modern digitalized organization with end-to-end digitalization however to complete digitalization there is a dire need for a strong infrastructure and audit. Which cannot be sustained without outreach of officials digitalization can only asset to the orbit of taxpayers who are within in tax net. No filers need to be located physically through survey and on-spot inquirers.
But the question here is that instead of being efficient to boost the country’s economy FRB is focusing on damaging the National treasury. FBR has written a letter to the standing committee on the issue of vehicle purchase. The contents of the letter are about Vehicles that will be given to officers of grades 17 and 18 working in the field. Letter Vehicles will not be given to staff of grades 19 and above.
Let’s have an eye on FBR’s stance in this regard:
FBR said that According to the law, vehicles are allowed to be purchased locally from the manufacturer or their agent. The country is currently undergoing an economic recovery, the sustainability of which depends on revenue collection. The FBR is working on a war footing to meet the target of Rs 1300 billion in tax collections. Until the FBR staff is mobilized to go to the field, it will be difficult to achieve the tax collection target. During the last fiscal year, the FBR was facing a tax gap of Rs600 billion, out of which Rs3500 billion was in sales tax bridging the tax collection gap is essential for economic development.
. Reforms in FBR require strong enforcement and audit, which is not possible without mobilizing officers.
. Digitization can only see the records of those taxpayers who are in the tax net.
. Unregistered individuals can be searched by going on-site and conducting surveys.
. In the last two decades, efforts have been made to understand business by sitting at a desk.
. The data provided by business people needs to be checked on-site through supply chain and audit.
. Due to not going on-site, our FBR officers are not familiar with the manufacturing process.
. For anti-smuggling and customs duty at the border, one cannot go to the borders without a vehicle.
. After consultation with the public and private sectors, investment was made in the FBR for revenue collection, which is essential for the country’s self-determination.
The things that the FBR has written in its letter can easily make anyone laugh after reading them, and that is because these things are exactly like a child asking his father to buy him a bicycle. The FBR should work for the nation, which is their responsibility, instead of buying vehicles for themselves, they need to be professional and benefit the National treasury. So the economy of Pakistan can escape from the IMF. This tax should be collected from those landlords who have not yet come under the tax net instead of people living under the line of poverty.
