Islamabad: Federal Board of Revenue (FBR) Chairman Shabbar Zaidi recently informed the Senate Standing Committee on Finance that the taxation authority may consider lowering the tax collection target (currently set at PKR 5.5 trillion) for Fiscal Year 2019-20, according to news sources.
Zaidi attributed the PKR 200 billion shortfall in tax collection during the first five months of this fiscal year to the import compression of over USD 2 billion. He said that imports contributed to 50% of the tax revenue collection. The total tax collected in the last five months’ amounts to PKR 1,618 billion against the PKR 5.5 trillion target set for the FY 2019-20.
He also informed the meeting that the turnover threshold had been increased to PKR 100 million from PKR 10 million following the successful negotiations held with the country’s retailers and wholesalers. The FBR chairman revealed that the rate of minimum tax had also been reduced to 0.5%. He opined that wholesalers and retailers contribute 18% to the Gross Domestic Product (GDP), but pay only 3% of tax revenue collection. He revealed that FBR was committed to maintaining its Computerised National Identity Card (CNIC) condition for traders.
Chairman Zaidi said that a policy for retailers and traders, and another for small businesses will would unveiled in near future, which would include incentives and facilities for the small and medium enterprises (SMEs).
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