Federal Board of Revenue (FBR) has collected taxes of Rs.3967 billion in the outgone fiscal year, which its authorities claim to have exceeded exceed the target of revenue collection by Rs.50 billion as downwardly revised with the IMF in the wake of Covid-19 pandemic. The improved performance is commendable, if viewed in the context of leadership crisis in the FBR, first stiff resistance put up by the top tax bureaucracy to the appointment of Chairman Syed Shabbar Zaidi from the private sector and later his sudden quitting of the top slot. The reformist Shabbar Zaidi had not shown leniency on his mandated task of documentation of economy to broaden the tax base by way of direct taxes. He had always been a punching bag for the traders who protested against the registration with tax authorities either under sales tax regime or income tax regime.
By and large, the improved performance of FBR can be attributed to the efforts of its Custom Department. The tax collectors of Inland Revenue Services Department are yet to show their worth in tax collection, particularly the sales tax from business that they charge from the clients.
Perhaps for the fear of another strike by the traders and political clout of black money holders, federal government has dropped the budget proposal to integrate the National Database Registration (NADRA) databank with FBR If this linkage is established then it will be easy for the tax collectors to unearth the hidden assets of citizens to enhance revenue collection. It merits mention that several gimmicks in the shape of tax amnesty schemes, including the one strongly pleaded by former Governor State Bank Dr. Ishrat Hussain, did not yield the desired result of increasing the number of taxpayers.
The rationale behind the proposal of establishing NADRA-FBR linkage was to increase the number of income tax returns and wealth statements in addition to getting access to the data of provincial land and tax authorities, housing schemes and telecom companies. However, it seems that federal government has caved in to the pressure lobbies.