ISLAMABAD, The Government should revise the tax collection target for FY2012-13, as Federal Board of Revenue has once again failed to achieve the annual revenue collection target of Rs.1,952 billion set for the financial year 2011-2012.
The Government has set a very high tax revenue target of Rs.2380 billion for FY 2012-13, which also seems unachievable as FBR has missed its desired tax collection target by margin of Rs.47 billion that would result into piling up of fiscal deficit target in on-going financial year, Asad Farid, Acting President Islamabad Chamber of Commerce and Industry (ICCI) has stated this during a meeting at Chamber House, says a press release issued here on Wednesday.
ICCI Acting President said that the false claims of the FBR for achieving tax target would negatively affect the overall growth pattern of our economy because unrealistic targets set by the Government in the federal budget every year was the main cause of fiscal imbalances faced by the government at the end of the year.
He feared that harassment by tax departments would increase to achieve this huge revenue target and tax machinery would be under extreme pressure to get revenue targets, announced in the Federal Budget 2012-13.
Asad Farid expressed concern over the World Bank report that tax gap was 69 percent in 2008, has now gone up to 79 percent which was the highest-ever figure. ICCI Acting said that no work has been done for the reduction of tax gap in the country which needs special consideration by the concerned authorities that would ultimately help increase the tax-to-GDP ratio.
He said that tax revenue accounts less than 10 percent of Pakistan’s GDP, which was extremely low while in India tax revenue accounts for 18 percent of the GDP.
He suggested that our Government should analyze the tax models of Sri Lanka, Turkey, Brazil and Taiwan, where tax-to-GDP ratio has shown major jump and revenue collection has increased substantially.
He further said that widening tax net is very much required but it must be in a systematic and realistic way, adding that Government need to focus on growth strategy and exploit the full tax potential, which was imperative to lead the country towards sustainable economic development.