Prime Minister Shehbaz Sharif has ordered the Federal Board of Revenue (FBR) to collect Rs. 7.6 trillion in taxes by June 2023 despite the tax regulator’s special initiatives.
According to a national daily, this was decided almost two weeks ago during a “Strategic Roadmap” meeting of the premier with ministers and secretaries, Finance, Privatisation, Industries, and Production, and Power Division, chairman FBR, among others.
At the meeting, Chairman FBR said the revenue collection target has been set at Rs. 7.47 trillion (by June 2023), which is 22 percent more than last year’s target. The regulator’s special initiatives in broadening the tax net have kept the cumulative revenue targets on track. However, factors such as import contraction, higher inflation, exchange rate, and interest rate policies may have an impact on the roadmap targets for meeting the PM’s target of Rs. 7.6 trillion.
During the open discussion, it was decided to include all revenue mobilization, expenditure, and privatization reforms for effective tax collection and routine reporting to the PM. After lengthy deliberations, it was decided that FBR would achieve the aforesaid revenue target, and upgrade its track and trace system in the sugar sector with all additional Rs. 20 billion tax collection in the sugar sector compared to Rs. 7 billion, and share roadmap on the implementation on the track system in sectors including cement, fertilizer, tobacco, beverages and POL products by December 31.
It was decided that the Finance Minister and Chairman FBR will review tobacco sector issues and prepare a detailed presentation by December 30, 2022. On a more pressing note, Chairman FBR will present by December 25 the strategy and implementation plan for integrating remaining tier-1 retailers in the next seven months.
Chairman FBR will also share with the premier’s office the most recent status on risk profiling of potential high-net-worth taxpayers and develop an immediate plan/strategy to bring these into the tax net, while the Finance Division will rationalize pension expenses by creating a pension fund by January 15, 2023.
Other decisions covering the majority of the fiscal backdrop were also made and will be updated in the coming weeks.
The revenue collection target for FY23 was originally Rs. 7,470 billion but due to floods and the aforesaid changes, the targets for the current financial year are being changed and the FBR revenue may be affected after the revision of targets.
