The Chairman of the Federal Board of Revenue (FBR), Asim Ahmad, said that for the first time, the Finance Bill 2022 is fully focused on direct taxes.
He stated this at a post-budget seminar and added that Prime Minister Shehbaz Sharif had instructed the FBR to focus on direct taxes, which is why 75 percent of the proposals were related to direct taxes.
In response to the Institute of Chartered Accountants of Pakistan’s (ICAP) proposal for admissible exemption, Ahmed said the FBR will discuss the issue of exemption, which is a policy decision and needs the approval of the parliament and the Institute of Chartered Accountants of Pakistan (ICAP).
He mentioned that the FBR wants to be part of the Tax-Gap Analysis to be conducted by the ICAP, which has not been done so far. The FBR has done tax-gap analysis with different research associations but not with the ICAP, Ahmed added.
After the completion of the budget exercise for 2022–23, the FBR invited the ICAP to help in simplifying the procedures and returns and reducing the cost of compliance with the help of technology.
The Chairman FBR said the FBR and ICAP will work together from the next fiscal year onward. The ICAP should constitute a committee in this regard, and the FBR will also form a committee to hold fortnightly or quarterly sessions, he remarked.
Ahmed said that the guiding principles for the budget included taxing real estate, farmhouses, unutilized land, etc.; more emphasis on direct taxes; taxing high-income earners; relief for salaried individuals; tariff rationalization; higher cost to non-filers; reducing the cost of compliance; and consultation with stakeholders.
He added that the Prime Minister has told the FBR to prepare a pro-poor bias budget and also give relief to salaried individuals.
Regarding revenue projections for the next year, the chairman said the FBR is expecting revenue amounting to between Rs. 6 trillion to Rs. 6.1 trillion by the end of the current fiscal year. Considering the autonomous growth of Rs. 824 billion and budgetary measures of a net Rs. 355 billion, the FBR’s projected collection for the next fiscal year will be around Rs. 7 trillion, of which Rs. 355 billion will be in taxation measures, and 75 percent of the proposals are related to direct taxes, he clarified.
