President approves 10-year taxation plan
SOHAIL SARFRAZ
ISLAMABAD (February 23 2007)
President General Pervez Musharraf has approved Central Board of Revenue (CBR) 10-year taxation plan, "Vision-2016." This vision to take total revenue collection to Rs 4.3 trillion and tax-GDP ratio to (14.5-15 percent) by 2016-2017 with the assurance to give full support to the tax agency on operational and financial autonomy, reform program and brining potential sectors including services.
The President and Prime Minister Shaukat Aziz visited the CBR House on Thursday. The Advisor to the Prime Minister on Finance Dr Salman Shah; Minister of State on Finance Omer Ayub; Governor State Bank Dr Shamshad Akhtar, Deputy Chairman Planning Commission Dr Akram Shaikh and senior officials of the Ministry of Finance also accompanied them.
A top government official told Business Recorder that the Secretary General Revenue Division and Chairman CBR M. Abdullah Yusuf gave a detailed briefing to the President on "Vision-2016", which is a 10-year program for raising revenue collection through broadening of the tax-base and raising tax-GDP ratio. "Vision-2016", envisages 10-year revenue projections starting from 2007-2008 to 2016-2017 and strategy to meet these targets.
Under the program, the CBR will achieve 5 percent growth in Tax-GDP ratio by tapping potential sectors in the next ten years. The government is likely to set revenue collection target of around Rupees one trillion for the next financial year. To achieve this objective, the board is brining improvement in administration, plugging the loopholes in the system and creation of taxpayer's data bank to discover new taxpayers.
The President has given go-ahead signal to the CBR for implementation of the "Vision-2016" along with tax policy reforms and tax administrative reforms aimed at enhancing revenue collection.
While reviewing the overall performance of the CBR, President Musharraf assured the CBR Chairman of his full support following remarkable performance of CBR in surpassing revenue targets and 20 percent increase in number of new taxpayers every year.
Official quoted President as saying, "whatever CBR needs for autonomy and implementation of the ten-year plan would be provided to Yusuf". The President also directed the CBR to bring those sectors into the tax net, which are contributing to GDP, but their contribution in taxes is comparatively less. He also asked the tax managers to maintain high growth rates for achieving revenue targets. In this connection, the CBR should explore new avenues to bring the service's sector including retailers into the tax net.
General Musharraf also directed the CBR to reduce the burden of indirect taxes on the poor segments of the society, reduce number of taxes, broaden the tax-base and raise Tax-GDP ratio for brining potential sectors into the tax net. For poor segments of the society, the CBR should pay special attention to curtailing the tax rates.
Sources said that the President was much interested in reducing the burden of taxes on low income groups particularly emphasised broadening the tax-base by encompassing more sectors of the economy for revenue generation in coming years. He directed the CBR to take effective measures for lowering tax rate on poor.
The President has asked the tax managers to continue with the policy of taxpayer facilitation, which would also help in broadening the tax-base. The CBR should provide conducive environment to the taxpayers, sources quoted President as saying to the CBR.
The fast track economic uplift of the country would require maximum revenues and CBR would have to speed up its efforts to achieve new targets, the President said. He said the mega development projects have been possible due to substantial increase in revenue collection for which CBR has played a commendable role.
CBR Chairman and the President also discussed taxation on retail and transporter sectors for brining these undocumented sectors into the tax net. For this purpose, CBR Chairman has given a sector-wise analysis to the President highlighting tax-GAP in different potential sectors. Tax authorities also informed the President about the measures taken to bring transparency in the organisation eradicating corruption. CBR Chairman talked out the compensation package offered to the employees along with the welfare activities for them.
He also commented on the history of revenue collection, current trends, creation of Large Taxpayer Unit (LTUs), Medium Taxpayer Units (MTUs), Model Customs Collectorate and Regional Tax Offices (RTOs). The increase in revenue collection, universal self- assessment scheme and drastic reduction in litigation.
Tax authorities also highlighted the Human Resource Management (HRM) policies with the mandate to restructure the board and its field formations on modern lines.
Chairman CBR said that the revenue collection target of Rs 835 billion for fiscal 2006-2007 would be hopefully achieved. During the seven months Rs 465 billion have already been collected which shows an increase of 25 percent as against the corresponding period of last fiscal. The Board had achieved 21 percent increase by collecting Rs 713 billion, surpassing the set target of Rs 690 billion.
When contacted other sources in CBR said that the CBR will offer Golden handshake to the employee on completion of automation and establishment of reformed units.
Copyright Business Recorder, 2007
rs. 4.3 trillion is like $70 billion dollors, thats a big plan by the president.
Business recorder
