Dr. Shamshad Akhtar, the interim finance minister, has requested information from the Federal Board of Revenue (FBR) regarding its plan for bridging the widening revenue shortfall and achieving the predetermined yearly objective.
Local media reported that in order to meet the annual target of Rs9.4 trillion, the government is currently concentrating on fixing massive tax leakages of Rs1 trillion.
Cracking down on smuggling was one of the areas for enforcement action that was identified during a high-level meeting that the minister presided over. But after the meeting was over, no press release was published.
The government cannot afford quarterly income deficits as part of the International Monetary Fund (IMF) program. In order to fulfil the agreed-upon targets by September 2023 and uphold budgetary discipline, it is imperative to address revenue leakages.
According to reports, the FBR has pinpointed five key areas for plugging leakages totaling Rs 1 trillion at a time when the tax collection system may experience a revenue shortage as a result of compressed imports.
In the wake of the economy’s slowdown, the administration did not prefer to take any extra measures to raise money to make up for the tax gap.
Five significant gaps might be filled, according to FBR management, to make up for the anticipated revenue shortfall in the upcoming months.
The FBR also noted a problem with tax evasion in the cigarette industry. On the properties of large corporations like the Pakistan Tobacco Company (PTC), Philip Morris Pakistan (PMI), and Khyber Tobacco, the Track and Trace System is being deployed. With the FBR, numerous other local manufacturers have now signed MoUs, but the Track and Trace system is still not fully functional.
The FBR listed catching sales tax evasion as the third area for increased taxation.
The FBR believes there was a significant opportunity to stop leaks after its Intelligence and Investigation (I&I) IRS tracked down the largest fraud involving bogus invoicing in Karachi that had connections to other areas of Punjab, including Faisalabad.
The fourth sector dealt with preventing the smuggling of money and other goods through Iran and Afghanistan.