FBR audits big sectors like sugar, oil refineries, beverages, cement for tax collection

FBR authorities have excluded chances of tax measures over the next few months, and have made it clear that there isn’t any room for adjustments in the pre-existing tax burden.

 

To maximize the tax collection, the Federal Board of Revenue (FBR) has initiated the observation of audits of big sectors like sugar, oil refineries, beverages and cement etc. This will help in recognizing the loopholes and gaps, which are hindrances in proper implementation.

While talking to The News, official sources in FBR said that domestic GST has shown 50% growth in the first two months, and now FBR has started deep analysis in sectors so they can produce maximum results of tax collection in the coming months.

FBR found that HSD’s (High-Speed Diesel) taxes weren’t fully emerging due to the issue of smuggling. Accountants or auditors of oil refineries have been called to explain the reason behind such occurrences.

“We have done a stocktaking of important sectors and knew that some sectors were selling products to unregistered entities/persons,” – said the official from FBR.
He also said that it has been decided that in cases of similar nature, input adjustments won’t be made.

Big growth has been observed in sugar, but the tax collection does still not satisfy the desired demand. In cement, shreds of evidence of tax evasion have been found. Similarly, in OMCs and oil refineries the input and output seem mismatched and suspicious.

FBR authorities have excluded chances of tax measures over the next few months, and have made it clear that there isn’t any room for adjustments in the pre-existing tax burden.


As per estimates, FBR can potentially collect Rs. 4,800 to Rs. 5,000 billion, which is less than the desired target of Rs. 5,503 billion. The shortfall of Rs. 500 to 700 billion will be covered by improved non-tax revenue collection or a decrease in spending to balance the budget deficit and bring it in terms within the limit set by IMF loan.

Breach on the budget deficit and primary balance owned will pose a threat to the IMP program under 39 months of EFF (Extended Fund Facility), as per the official.

Until 26th September 2019, FBR has collected Rs. 263 billion, which is less than the monthly target of Rs. 491 billion, which was put so they can display Rs. 1,071 billion on its board on 30th September, in harmony with the requirements put forth by IMF.

Some adjustments have been made by FBR to achieve the annual goal of Rs. 5,503 billion collections, the envisioned targets of IR (Inland Revenues), including Income Tax, Sales Tax and FED (Federal Excise Duty) was reviewed, while the target of Customs Duty was cut off.

“Against the desired tax target of Rs. 1,071 billion for July-September period of 2019-20, the FBR collection likely to climb to Rs. 960 to Rs. 980 billion on September 30, 2019, indicating a shortfall of Rs91 billion to Rs110 billion,” – top officials of FBR said while talking to The News.

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