ISLAMABAD: All governments gave fake revenue collection figures and the targets were met only by squeezing existing taxpayers, a Senate committee noted here on Thursday.
“This is a bad tradition by all governments, including ours, and it has resulted in an altogether false statement; even the budget deficit figures are incorrect,” said Senator Saleem Mandviwalla, chairman of the Senate Standing Committee on Finance.
He suggested to Federal Board of Revenue chairman Nisar Mohammad Khan to stop accepting unrealistic revenue targets.
The FBR chief admitted that the revenue collection target of Rs3.62 trillion was high and seemingly unrealistic. “Though we did not agree to it, we will achieve it,” he told a meeting of the committee.
Mr Mandviwalla regretted that the FBR ‘grilled and ground’ the existing taxpayers to meet the collection targets. “What have you done to deal with the non-taxpayers? They are all at ease, but those paying taxes have to bear the brunt of your highhandedness only because you need to meet the targets,” he said, adding that even the collection figures were unrealistic and hotchpotch between the finance ministry and the FBR.
“Apart from the fake figures, what they do is take taxes in advance,” Senator Mandviwalla said, adding: “The FBR has already taken taxes up to December 2016 from the National Bank and I can even give names of private entities which have paid taxes for the next three to six months because the FBR asked for it. This results in a shortfall in future and such mismanagement is done to manage the numbers.”
Senators Nasreen Jalil, Kamil Ali Agha and Ayesha Raza Farooq said real budget deficit would be much higher than what was shown in the documents.
The committee was informed that tax collection for the first quarter of the current financial year was Rs625 billion, which was about six per cent higher than the same period of the last fiscal year. But, the FBR chairman said, the collection target was 18 per cent for the same period.
The committee members said the highhandedness of the FBR should end and there was a need to streamline the tax collection system.
The Senate committee said it planned to strike down Section 138 of the Income Tax Ordinance that allowed the FBR to seize the bank account of a person who paid less than the required tax.
At this, Mr Khan informed the committee that the FBR had stopped seizing the account after issuing the notice and action was taken at the appeal stage only.
He said tax collection had declined because of a fall in oil prices as well as the value of commodities and other items being imported.
The committee also discussed the impact of monetisation of vehicles on the annual budget of ministries.
“This policy was introduced by the Planning Commission during the last PPP government, but it has resulted in a failure,” Senator Mandviwalla said.
He said it was decided that officers of grade-20 and above would be handed over official vehicles after payment of some charges and an allowance would be given in their monthly salary. This would help the government save the money spent on maintenance of the vehicles.
“Incidentally, the fuel bill of any ministry has not come down, even though oil prices have declined for a long time now, but what about the allowances being paid to officers,” he regretted.
The committee was informed that a joint secretary was getting Rs65,000 per month in terms of fuel charges and this increased with seniority, while a federal secretary was being given Rs120,000 per month for petrol/diesel and car maintenance.
The committee decided to gather the budget of all ministries in terms of fuel and the number of vehicles maintained by them to take up the matter with the Planning Commission again.
Published in Dawn, November 11th, 2016