ISLAMABAD, June 2: Top tax machinery on Saturday introduced a string of legal and administrative measures to check bleeding of Rs50 billion to Rs100 billion in refund payment against fake and flying invoices to bogus companies operated by fraudsters, a senior official told Dawn.

Aside from these, a host of amendments were made in customs and sales tax acts to discourage smuggling. At the same time, pilferage of the Afghan transit goods in Pakistan were also declared as smuggled goods and those involved will be imprisoned for a period of five years.

Federal Board of Revenue Chairman Mumtaz Haider Rizvi told Dawn on Saturday that the sales tax rate was reduced to 16 per cent on imports across-the-board from 22 per cent and 19.5 per cent on various goods to reduce the claims for input tax adjustments.

With the reduction in sales tax rates, the margin for the speed money has automatically been minimised, he said, adding this will help to a large extent in reducing the issuance of fake and flying sales tax invoice claims.

In the outgoing fiscal year, Mr Rizvi said that Rs44 billion worth illegal refund payment against input tax adjustment had been detected and cases were also lodged against the fraudsters. The total input tax adjustments payments to taxpayers in a year stood at Rs200 billion, making it hard for the tax officials to filter illegal payments.

The chairman clarified that the rate of federal excise duty of 25 per cent on CNG, 19.5 per cent on telecom sector and eight per cent on sugar will remain the same. There is no sales tax on these products but only FED with the permission of adjustments, the chairman added.

Contrary to this, the FBR has removed a draconian law that allowed the punishment of whipping in cases of smuggling, possession or acquiring of smuggled goods. This was unlawful to punish a smuggler with whipping, the chairman FBR said.

The pilferage of Afghan transit goods was also declared smuggling. Those found in pilferage will also be imprisoned up to five years.

Mr Rizvi said that government had exempted federal excise duty on smuggling-prone items like cosmetics, filter rod used in cigarettes, etc.

He said government has already committed to phasing out excise duty. The sales tax on tea was reduced to five per cent from 16 per cent to check smuggling.

Mr Rizvi claimed that the reduction of customs duty on shredded tyres to 10 per cent from 20 per cent would not only help cement industries to produce energy but will also yield additional Rs7 billion for the government exchequer.

Official documents reveals that the enhancement of minimum threshold from Rs350,000 to Rs400,000 will give relief to 51,032 salaried taxpayers, 6,300 business individuals and 7,088 association of persons (AOPs), respectively.

With the changes in tax slabs, 869,009 salaried persons will get relief in payment of income tax on incomes from next year, 499,981 business individuals and 30,718 AOPs, respectively.

Finance Minister Dr Abdul Hafeez Shaikh in a post-budget press conference said that the FBR had recorded a 25pc growth in revenue collection. He said the collection for the whole year would be Rs1,900 billion plus. However, he did not elaborate the quantum of plus revenue.

The government has projected a revenue target of Rs1952 billion for the year 2011-12. The chairman FBR said that he was determined to achieve the original target.

He said that the tax machinery has collected Rs1,632 billion up to May 31 leaving an amount of Rs320 billion to be collected in the month of June. Last year in June Rs240 billion revenue was collected. This means an additional revenue of Rs70 billion over the last year June, he said.“It is very tough target but we will make it”, he said. He said the amnesty scheme; import of fertilisers will give additional revenue in the month of June.