Interim Finance Minister Dr. Shamshad Akhtar has asked the Federal Board of Revenue (FBR) to share its plan for achieving the fixed annual revenue target of Rs. 9.4 trillion.
The minister summoned the workable strategy while chairing a high-level meeting with other government and FBR officials on Tuesday.
FBR has identified five areas for filling a massive Rs. 1 trillion gap.
The tax regulator discovered that while withholding taxes were being collected by agents, they were not entering the tax net. Officials said effective withholding tax monitoring (1) could increase tax revenues by up to Rs. 200 billion in the current fiscal year.
The FBR has cited tax avoidance in the cigarette industry (2) as an issue. The Pakistan Tobacco Company (PTC), Philip Morris Pakistan (PMI), and Khyber Tobacco have all installed the Track and Trace System on their premises. Other manufacturers have also got onboard with the FBR but the Track and Trace system is still a work in progress.
The regulator is of the view that an additional tax of Rs. 50 billion could be collected from the tobacco sector through stringent measures.
Another pivot was on preventing the smuggling of foreign currency and other commodities via Afghanistan and Iran (3). Detection and legal action against sales tax fraud (4) was another area identified by FBR.
Import valuation (5) has been suggested as another avenue for increasing revenue. It has been determined that proper assessment of commodities imported from other countries could significantly increase tax collection.