ISLAMABAD: In a bid to minimise yawning revenue shortfall, the Federal Board of Revenue (FBR) has posted monitoring teams at all Sugar mills all over the country in order to record actual production and detect any tax evasion, The News has learnt.The FBR has invoked powers under Section 40-B of Sales Tax Act for posting its teams at all Sugar mills for monitoring purposes on rotation basis after which the Sugar production has gone up by 70 percent.The enforcement campaign has been launched against many sectors including sugar, real estate, mega retail and chain stores and other sectors such as fashion designers as well as cement sector. The enforcement campaign has been launched at a time when the FBR is facing massive revenue shortfall to the tune of Rs237 billion in first eight months (July-Feb) period of the current fiscal year. Now it is yet to be seen how much the FBR can move towards reaching nearer to the desired target of Rs4,398 billion on June 30, 2019 which simply seems impossible to achieve keeping in view the existing shortfall.The FBR generated total tax demand of Rs6.638 billion from all sectors and so far recovered Rs2.976 billion in the current fiscal year.The monitoring of Sugar sector has resulted into creation of tax demand worth Rs3.224 billion in last two months out of which the FBR recovered Rs457 million, one top official of the FBR disclosed while talking to The News on Friday. The tax demand of Rs561 million has been generated from real estate sector and recovery stood at Rs352 million. The demand from retail sector generated to the tune of Rs823 million and recovery made so far standing at Rs520 million. The FBR made tax demand of Rs2.030 billion from all other sectors and recovery stood at Rs1.647 billion.The tax demand of Rs1.9 billion was generated alone in case of Omni Group in Karachi, but the company got stay order in this case from the superior judiciary. In order to plug loopholes, the FBR took policy-level decisions and issued two important statutory regulatory orders (SROs) including SRO 32(1) 2019 dated 09-01-2019 under which as matter of policy decision sale of cane molasses, a bye-product in the process of Sugar manufacture, now cannot be sold to un-registered persons. The restriction is aimed at improving documentation and provide basis to detect un-declared production of sugar.In another policy measure through SRO 14(1) 2019 dated 02-01-2019, the decision of export of ethanol shall only be allowed if ethanol is manufactured from molasses directly purchased from Sugar mills and amendment in export policy order incorporated. This notification envisages that a registered person purchasing molasses from an un-registered person shall withhold sales tax at rate of 17 percent on such purchase while making payment. Currently, the FED at Sugar is charged at rate of 8 percent.“The production of Sugar mills was monitored by Large Taxpayer Unit (LTU) Lahore and average production of bag per day resulted into surge in declared production by 70 percent as compared to the same period of the last year. The collection of sales tax from Sugar sector from July-Jan in LTU Lahore has gone up by 30 percent during this period,” said the official.The FBR has collected additional Rs1.5 billion with increased declaration of production in the ongoing financial year.The FBR’s female officer Saadia Sadaf Gilani, Commissioner RTO-II Lahore has proved herself as trend setter in the ongoing enforcement campaign by the FBR and clinched the top position for generating tax demands and on front of recovery of taxes during the current fiscal year, the sources said.Meanwhile, Prime Minister Imran Khan has directed the FBR to take action against five kinds of celebrities including singers, sportsmen, media personalities, politicians and businessmen and real estate tycoons.A message sent out to field formations by the top officials of the FBR is stating that the PM desired action against those whose declared income does not match with their lifestyle. The preferred areas are celebrities including singer, sportsmen, media personalities, politicians and businessmen including real estate tycoons.This scribe contacted one top official of the FBR to verify this information, who confirmed stating “yes”.The Chief Commissioners of Inland Revenues (CCIRs) are requested to firm up their lists of such persons for action and share the same with FBR headquarters.The FBR plans to take action against 100 celebrities in first phase to demonstrate deterrence for moving ahead with stern action in case of influential.Last week, Prime Minister Imran Khan had directed the FBR for launching crackdown against celebrities of different segments of the society after gathering solid information in order to create deterrence for effective enforcement.In ongoing initiative against high net worth individuals, the FBR so far sent out 6,451 notices on the basis of available information related to rental income, properties and owning luxury vehicles of over 1800cc.“Out of 6451 tax notices, the FBR has so far obtained income tax returns from 2,671 and generated demand of Rs2.165 billion out of which the recovered tax amount stood at Rs1.372 billion so far in the current fiscal year,” said the official.The revenue effort on part of the tax collection machinery, the official said, started yielding positive results and pointed out that it came on the surface with time lag.“The loopholes are being plugged and efforts will be made to go close to the desired target of Rs4398 billion,” said the official and refused to share any exact figure and contended only as saying that all out efforts would be made compensate revenue shortfall through revenue mobilisation efforts as much as possible in the remaining period of the ongoing financial year.
03-02-2019, 03:07 PM
Sugar production up by 70pc as FBR appoints teams at mills
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