960422

CBR optimistic to

surpass Rs 265 bn

revenue target

IKRAMUL HAQ

ISLAMABAD: The Central Board of Revenue hopes to exceed the revenue target of Rs 265 billion for the current year. This optimism was voiced by CBR Chairman Alvi Abdul Rahim on the basis of the collections for the nine months ending March 31.

Addressing a press conference, Alvi said that during the last three quarters total receipts were Rs 180.1 billion against the target of Rs 180 billion. The collection of direct and indirect taxes was just around the target fixed for these.

Overall, he said, tax receipts were 18.4 percent higher, as only Rs 152.1 billion were collected up to March 31 last year.

Alvi said that the exact target for the year was Rs 265 billion but it could be revised in the light of the performance during the last quarter.

Answering a question about handing over of income tax collection to the private sector, Alvi said it was not found anywhere in the world. Customs, he opined, was a different matter. Assessment of tax was a crucial issue in direct taxes, he added.

He, however, said that the Third World countries did examine various proposals to add to revenues. "We also do that."

When asked about a meeting already held in Lahore in this regard, Alvi said they continuously considered various proposals and this was one of them.

The committee which has Member Income Tax, Mian Iqbal Farid, as Secretary is preparing a report which, he said, would be ready before the budget. "I welcome any new revolutionary idea . . . . I neither support it nor oppose it."

Analysing the progress of tax collections in nine months, he noted that customs collection in the first four months was below the estimate because of low tempo of imports which consequently affected the sales tax also. But in the following months the situation had improved and both receipts were close to the target.

The target for Customs was Rs 62 billion while the collection was Rs 61.8 billion, against last year's receipts of Rs 54.87 billion.

Sales tax collection amounted to Rs 34.75 billion against the target of Rs 35 billion and corresponding collection of Rs 29.99 billion last year.

Income tax receipts this March amounted to Rs 48.65 billion against the target of Rs 48.5 billion while last year collection was Rs.37.98 billion.

Responding to a question, he said that the increase in the Customs revenue was not entirely due to the ten percent regulatory duty, though it had played its part. This duty had made some impact, but he could not readily give the exact figure.

Collections over last year

Rs in million

Taxes Nine monthly Collections Collections Improvement in

Target in 1995-96 in 1994-95 collections

Direct taxes 48,500 48,650 37,987 10,663

Customs 62,000 61,801 54,482 7,319

Central excise 34,500 34,893 29,647 5,246

Sales tax 35,000 34,754 29,993 4,821

Total 180,000 180,098 152,049 28,049

APP adds:

Responding to a question about the withdrawal of exemptions of retail tax on 42 items recently, Alvi said it would help improve revenue collections by Rs. 1.2 billion in one year. However, its impact in the last quarter of the current fiscal year would be to the tune of around Rs. 300 million on the revenue collections.

He further said that the earlier shortfall in Customs and Sales Tax collections was almost offset in the third quarter and these heads now achieved the nine-monthly targets of revenue collections.

The Chairman said that the original revenue collection target fixed in the budget was of the tune of Rs. 270 billion for 1995-96.

He said the central excise duty was reduced on crude and furnace oil and petroleum development surcharge of similar amount was imposed, thus revising the revenue target to Rs. 264.8 billion. The petroleum development surcharge, he said, would directly go to the Finance Ministry. Thus, he added, there was no change in overall revenue collection target.

Alvi said there were about 250 exemptions at the manufacturing and import stages in the sales tax. While in income tax Second Schedule, he said, there were 100 exemptions which however, were not very important.

He remarked that there should be reasonable difference between the revenue and expenditures for a healthy economy.

Responding to a question about the withdrawal of exemptions from the special industrial zones, he said those industries which opened LCs before the withdrawal, would be provided protection.

A list of different industries in this regard, he said, was provided by the Board of Investment, which was honoured by the Central Board of Revenue regarding protection to the industries already set up in the special industrial zones.