Pakistan Dashes to Meet Yearly Tax Target
June 29, 2012 Taxation in Pakistan
ISLAMABAD – The Federal Board of Revenue of Pakistan is scrambling to raise nearly PKR 150 billion by the end of June in order to meet its tax revenue targets for the current fiscal year.
On June 28th media outlets in Pakistan released reports alleging that the Federal Board of Revenue is blocking and delaying tax refunds in an effort to postpone outward payments and raise overall tax revenues in order to the tax revenue targets set out for the year.
The Federal Board of Revenue was tasked with collecting PKR 1.95 trillion by the end of the current fiscal year, which ends on June 30th. However, by June 26th the Board had only reached a level of collections of PKR 1.81 trillion, and still needed to raise PKR 142 billion over the last four days of the month.
According to the Pakistani media, the FBR is avoiding paying out tax refunds by delaying acceptance of legal decisions on cases involving significant tax refunds. The Board is expected to move forward with the refunds at the start of the next fiscal year, on July 1st.
The FBR is also asking automobile manufacturers to delay making claims on input tax adjustments until June, in order to minimize the number of payouts made during this year.
In an effort to claw back some revenues lost due to tax evasion, the FBR is waiving the surcharges and penalties applicable to cases of illegally adjusted input tax, if the offender deposits at least one quarter of the evaded amount by June 30th and pays the remained over the course of the current calendar year.
Allegedly the Board has also issued a notice to all banks in the country advising them to pay withholding taxes by the end of June, and not within 7 days of the end of the fiscal year, as is standard practice in the country.
Photo by sun dazed