The Federal Board of Revenue (FBR) Chairman Salman Siddique informed the National Assembly Standing Committee on Finance and Revenue that 74 percent tax gap in the country.

While briefing to the committee here on Friday, Salman Siddique told the committee, according to a study conducted by the FBR on 2008, 74 percent tax gap in Pakistan worth of Rs 796 billion which is 24 percent in USA and eight percent in UK.

He said that Rs 588 billion tax evasion in direct tax out of Rs 557 billion evasion in business income tax (WHT), Rs 31 billion in income tax salaried individuals. He said that Rs 208 billion evasion in indirect taxes, out of which Rs 113 billion evasion in sale tax, Rs 63 billion in FED and Rs 32 billion in import duties.

Salman said that the reduction in tax gap in the country is challenge for the performance of the FBR adding these figure are according to the fiscal year of 2008-09.

During the fiscal year 2008-09, the FBR had collected up to Rs 1200 billion revenue collections while the tax gap was identified Rs796 billion in that time which grew as per revenue collections.

The chairman said that he had accepted the responsibility for presenting false revenue figures during press conference in June 30, 2011 and resigned from the office but the Finance Minister did not acceptable my resignation and direct to continue job.

He said that 11 out of 21 RTUs and LTUs presented false revenue figures in June 2011 to show that the revenue target Rs 1588 billion has been achieved but the FBR was missing the target as actual revenue collections were Rs 1550 billion. He said that action has been initiated against the persons who were involved in the scam and Member Inland Revenue has been posted and the concern officers of the RTUs asked for reporting in Headquarters.

He said that the government has set target of Rs 1952 billion revenue collections for the current fiscal year adding that Rs 90 billion revenues will be collected by administrative actions during the period. He said that the revenue target has been given to the field officers on monthly basis adding that show cause notice to be presented to the field officers who fail to the achieve the revenue target in one month and to remove from service after second failure.

Salman Siddique briefed the committee that after 18th amendment, the provincial governments should be engaged for taking fiscal responsibility. He said that provinces were looking to the Federation in past but the provinces play their role for national fiscal responsible.

Siddique said that FBR faced Rs 50 billion lost in container missing scandal from Jan. 2007 to October 2010 adding that during the period 0.0350 million containers were cleared from Karachi port but 23952 containers were missed in Pakistan and they could not reach Afghanistan. He said the responsibility of traffic in Pakistani area was on the National Logistic Cell (NLC) therefore the NLC was asked for explanation.

The chairman said that the federal government had introduced 15 percent flood surcharge on income tax for the period of March to June 2011 for providing relief to the flood affectees. He said that the FBR had set target Rs 36 billion revenue collections by flood surcharge but only eight billion rupees have been received so far. He said that the FBR called a meeting of tax experts for looking into the matter.