Towards ‘clean taxation’


Asad Tahir Jappa

FBR has launched a new culture of clean taxation with a clear focus on collecting only the fair tax and not holding up refunds which are due to be paid

FBR is hitting headlines as it continues to surprise many by its consistent growth in revenue collection. In his recent address during a ceremony held in connection with Kamyab Pakistan Program, Prime Minister yet again generously appreciated FBR for its spectacular performance which gave the government enough fiscal space to spend on the weal and welfare of the weak and vulnerable segments of society through subsidies, valuing over Rs.200 Billion. Building further on its ongoing momentum for revenue collection, FBR has not only achieved its assigned target of Rs.441 Billion fixed for February,2022 but also exceeded the same by Rs.2 Billion as it has collected Rs.443 Billion. It has released the provisional revenue collection figures for the months July, 2021 to February, 2022 of current Financial Year 2021-22. According to the provisional information, FBR has collected net revenue of Rs 3,799 billion during July, 2021 to February, 2022 of current Financial Year 2021-22, which has exceeded the target of Rs 268 billion. This represents a growth of about 30.3% over the collection of Rs. 2,916 billion during the same period, last year. It is worth sharing that Inland Revenue collection increased by 29.0% during July, 2021 to February, 2022 by collecting Rs. 3,177 Billion against Rs.2,463 Billion collected in the same period, last year. Likewise, Pakistan Customs has successfully maintained its growth trajectory by collecting Rs.622 Billion as against Rs.454 Billion collected during the same period, last year. The net collection for the month of February, 2022 realized Rs 443 billion representing an increase of 28.3 % over Rs.345 billion collected in February, 2021. These figures would further improve before the close of the day and after book adjustments have been taken in to account.
On the other hand, the gross collections increased from Rs3,074 billion during July, 2020 to February, 2021 to Rs 3,996 billion in current Financial Year July, 2021 to February, 2022, showing an increase of 30%.Likewise, the amount of refunds disbursed was Rs 197 billion during July, 2021 to January, 2022 compared to Rs 157 billion paid last year, showing an increase of 25.4%.It is pertinent to mention that FBR has introduced a number of innovative interventions both at policy and operational level with a view to maximize revenue potential through digitization, transparency, and taxpayers’ facilitation. This has not only resulted in ensuring the ease of doing business but also translated in a healthy and steady growth in revenue collection. Likewise, the incumbent top leadership of FBR has launched a new culture of clean taxation with a clear focus on collecting only the fair tax and not holding up refunds which are due to be paid. This has not only fast tracked the process of bridging the trust deficit between FBR and taxpayers but also ensured the much-needed cash liquidity for business community. That’s precisely why, for the first time ever in the country’s history, FBR continues to surpass its assigned revenue targets despite challenges and price stabilization measures adopted by the government.
This exceptional performance has not happened overnight. The country’s premier revenue collection organization has introduced a new culture of clean taxation ensuring transparency, taxpayers facilitation and ease of doing business through a wide array of digital interventions. Amongst various innovative interventions made by FBR to maximize tax compliance through automation of its operations, Point of Sale System is one key initiative which aims to monitor sales made by Tier-1 Retailers across Pakistan. Adding value to this critically important sector and plug revenue leakages in a sector with annual turnover worth over Rs. 20 Trillion, FBR has launched an aggressive awareness campaign on the mainstream national media to educate and engage consumers in order to ensure that tax collected from them at the point of sale is deposited into state exchequer and not pocketed by the retailers themselves. Furthermore, the campaign also encompasses a prize scheme worth Rs.53 Million to be disbursed among 1007 lucky winners through a transparent computerized ballot to be held on 15th of every month at FBR Headquarters, Islamabad. This is truly an unprecedented example of involving citizens in tax compliance and raise their awareness about their national responsibility to not pay their due tax but also safeguard the same from being stolen on its way to national exchequer.
The ongoing outreach campaign on the prize scheme continues to gain momentum as numbers keep growing up. In January, FBR has witnessed that about 2,49,000 invoices were verified by customers who shopped from outlets integrated with FBR POS System as against 153,000 in January 2022. Likewise, around 38 Million invoices were issued by Tier-1 Retailers which are integrated with FBR POS System in February as compared to 37 Million in January, 2022, despite the current month being short of 3 days as compared to January. Approximately, another 4 million verified invoices would have been added to tally if 3 more days were available in February. The number of customers has also jumped from 27,000 in January to around 39000 in February who successfully verified their invoices.
This is a phenomenal increase in public participation and is likely to further grow with every passing day. The second computerized ballot was held on 15th February (Tuesday evening) at FBR Headquarters, Islamabad, with Finance Minister, Shaukat Fayaz Tarin, as the Chief Guest. It is very heartening to see that people at large are excited to engage in this national call to duty. In its ongoing country-wide awareness campaign, FBR has appealed the Pakistani citizens to actively promote a culture of tax compliance in the country. The country’s premier revenue collection organization has suggested a three pronged strategy to ensure that Sales Tax collected from customers at the point of sale could actually be deposited in the state exchequer. FBR has proposed that people should shop only from those Tier-1 retail outlets which are integrated with FBR POS System, demand computerized invoice (Pakki Receipt), and finally verify the same through FBR Tax Asaan App.
It is so very reassuring to witness that citizens have started responding to this call to national duty and are demanding Pakki Receipt from the retail outlets. FBR has already distributed prizes worth Rs.106 million among 2014 lucky winners in two successive computerized ballots held in a transparent manner on 15th of January & February 2022. It is also worth sharing that people are showing a lot of interest in becoming part of next computerized draw, which will be held on 15th March, 2022. This empowering zeal and exemplary commitment shown by huge number of people at large is a testimony to their trust in FBR and its innovative POS Invoicing Prize Scheme. The national spirit has already triggered an increased sense of responsibility in the people at large to become the custodian of their tax collected by the retailers in order to ensure that the same is safely deposited in the national exchequer. This innovative initiative of engagement of customers is all set to pick momentum and thus accelerate the desired national drive to promote tax compliance and substantially increase revenues. It also aims to incentivize people to play their role as responsible citizens and compliant taxpayers. The POS Prize Scheme is providing an opportunity to people to win cash prizes after they shop from Tier-1 POS integrated retail outlets by verifying their receipts through Tax Asaan App or SMS.
Furthermore, as a result of strong enforcement by FBR Field Formations across Pakistan, out of around 4200 identified as Tier-1 Retailers, over 3600 have already integrated their business operations with FBR POS System. Their 17000 outlets with over 19500 cash counters are fully integrated with POS System which lends FBR the facility to digitally monitor their sales and thus ensure that Sales Tax being collected from customers is being actually deposited into state exchequer, without fail. This is only the beginning of a long journey to document the country’s economy through digitization and automation. The last and the best is yet be.