ISLAMABAD: The government may fix Rs 5800 billion as revenue collection target for the Federal Board of Revenue (FBR) for 2021-22.
Sources told Business Recorder here on Wednesday that the FBR’s tax projections for the next fiscal year is expected to be set at Rs 5800 billion on the basis of estimated collection of Rs 4691 billion in 2020-21.
So far, the tax machinery has collected net revenue of Rs. 4,170 billion during July-May 2020-21, which has exceeded the target of Rs.3,994 billion by Rs. 176 billion. This represents a growth of about 18 percent over the collection of Rs.3, 549 billion during the same period last year.
According to sources, the FBR is working on different proposals to generate additional revenue of Rs 480-500 billion through withdrawal of sales tax exemptions, abolition of concessionary/reduced sales tax rates, changes in Federal Excise Duty (FED) regime, raise in tax burden for higher income slabs in salaried class, reduction in the number of personal income tax slabs from 11 to five, adjustment of rental income, installation of Point of Sale (POS) machines at 85000 branded chains in urban centres with lower rate of 12 percent sales tax for textile and 14 percent sales tax for other sectors.
The FBR had estimated to collect Rs125 billion on account of PIT in the outgoing fiscal year but after introduction of reforms in the next budget the revenue collection would go up to Rs150 billion in 2021-22, officials said.
The withdrawal of exemptions has been estimated to generate around Rs 140 billion in the next fiscal year, they said.
According to sources, the FBR is reviewing reduced income tax slabs (11 to 5) for the salaried individuals and business individuals; income tax slabs for rental income, dividend and other heads of taxation following the revision of slabs under the Personal Income Tax (PIT) regime.
The FBR is also focusing on administrative and enforcement measures on the sales tax side including third party audit and launching of the E-Audit system, officials added.
Copyright Business Recorder, 2021