Tuesday, March 3, 2009

FBR plans to stop tax evasion from wholesale, retail stores



By Muhammad Yasir

KARACHI: The Federal Board of Revenue (FBR) has planned to initiate measures to curb tax evasion from various wholesale and retail stores in major cities of the country, official sources said on Monday.

Sources said that the revenue department has intended to install its own electronic registration system at the counter machines of wholesale and retail outlets of different international and local stores aimed at creating direct taxes from the sector.

The revenue authority, in the beginning of this fiscal year, asked all such stores including groceries and departmental, medicine and healthcare, cosmetics and toiletries, shoes and clothing to set up electronic registration system to sum up their sales so that their income tax could be measured according to the record of digitals machines. However, a significant number of wholesale and retail outlets have not installed electronic price counters or information systems so far and continued to maintain their sales record manually.

Besides, tax official said, the federal revenue collection authority is not satisfied with the collection of income taxes from these wholesale and retail outlets made through existing electronic machines.

Taxmen added that the board would also plan to check sales records of their suspended machines on weekly and daily basis in order to monitor the records of the wholesale and retail shops.

Tax officials were of the view that the revenue collection authorities would take every possible measure to generate taxes from its potential taxpayers’ sectors, and the wholesalers and retailers’ sector is one of them where a handsome tax could be generated by minimising or stopping tax evasion.

The tax department has to achieve tax-to-GDP ratio at 10.2 percent as per International Monetary Fund (IMF) conditions by the end of fiscal year 2008-09, which were recorded at 9.5 percent in 2007-08.

FBR has met a shortfall of Rs 53.48 billion in federal tax collection during the first seven months of the current fiscal year 2008-09. In line with the upward revised tax collection target of Rs 1.360 trillion, FBR is chasing a target of Rs 681.7 billion, however, provisional collection has amounted to Rs 628.22 billion only.

IMF has expressed concern over the revenue collection growth of the country that was predicted to miss the annual financial year’s target, besides other macro-economic targets of the country including GDP growth rate, inflation, tax collection, foreign direct investment, privatisation proceeds and export and import targets. (DT)

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