Advance tax collection to go by June 2005
* Over Rs 25b is raised through advance collection and withholding refunds
ISLAMABAD: Abdullah Yousaf, chairman of the Central Board of Revenue (CBR), has set a June 2005 deadline to eliminate advance tax collection and delay in refunds, an official said here Monday.
In a recent series of collectors conferences and interactions with senior tax officials, Mr Yousaf made it clear to the tax managers that from June 2005 CBR would not allow advance tax collection and withholding of refunds of the business community, he said.
Advance tax collection and withholding of billions of rupees worth of refunds of businesses every year enable the tax authorities to meet ambitious annual targets of revenue collection, but create liquidity problems for businesses.
The official said every year in December and June CBR officials resort to advance income tax and sales tax collection from public and private companies.
He said more than Rs 25 billion is raised through advance tax collection and by withholding refunds of exporters, importers and manufacturers.
In the current fiscal, the tax authorities may again repeat the long-standing exercise of raising advance tax and also delaying the refunds of the business community to achieve the Rs 510 billion target. But from June 2005 neither there will be advance collection of income tax, sales tax nor delay in refunds, he added.
The CBR official pointed out that for the past many years the business community of the country had been demanding the payment of refunds without the traditional delay.
He said that the task of abandoning advance tax collection and eliminating delay in refunds seems very difficult, but it can be achieved in the existing scenario as all the sectors of economy are showing strong performance, leading to a sharp increase in tax revenue collection in this fiscal.
Growing exports, imports, industrial production, credit provision by banks to companies and consumers have had a positive impact on revenue collection.
The official also said that during recent meetings the tax managers have assured the new chairman CBR of the elimination of advance tax collection and delay in refunds. The tax officials have also assured the CBR chief that the current target of Rs 510 billion would be achieved by June.
The CBR has recorded a sharp increase in tax revenue in the first eight months of this fiscal because of improved economic activity. Total revenue collection in July to February this fiscal stood at Rs 310 billion that is Rs 12 billion above the required target of Rs 298 billion. —JM
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