IR officials can now recover overdue non-tax revenue

KARACHI: The government has empowered revenue officials to recover overdue non-tax revenue during the current 2020/21 fiscal year, sources informed The News on Saturday.

An amendment has been made to the Public Finance Management Act, 2019 in the Finance Act 2020 and approved by the National Assembly to assign addition task of non-tax revenue collection by the officials of Inland Revenue department of the Federal Board of Revenue (FBR).

The government sees Rs1.6 trillion of non-tax revenue during the current fiscal year. FBR revenue target is set at Rs4.963 trillion. “As per amended legislation if non-tax amounts are not been paid by a government department, company or an individual within 90 days of having the amount, the finance division, in consultation with the concerned division may refer any defaulter’s case to the commissioner Inland Revenue for recovery,” the source said. “The default amount will be taken as an arrear of Income Tax”.

Moreover, the Commissioner Inland Revenue is required to recover the arrear amount in accordance with the provision of the Income Tax Ordinance, 2001 and deposit the receipt in the federal consolidated fund.

The government receives non-tax revenue under Article 78 of the Constitution, and the recurring income of the government from investment and provision of services. However, it does not include those incomes that are mentioned in Article 160 of the Constitution.

According to Public Finance Management Act, 2019 public entities are required to pay non-tax revenue, which includes: mark-up on loans lent by the government, as per the amortization schedule attached with the financing agreement; and dividend against the government equity investments as declared by the respective board of directors out of accrued profits of the entity.

According to the act, the non-tax revenue representing foreign grants and payments, receipts from the provision of services, rents, recovery of over payments, sale of property etc. shall accrue on completion of the prescribed process.

It further said the revenue collection offices shall be responsible for the collection of all the accrued amounts of non-tax revenue from liable public entities, individuals, firms, companies etc. as per the time specified in the relevant laws and rules.

Moreover, it said the revenue collection offices shall not retain or appropriate the collected amounts to meet departmental expenditures except through budgetary mechanism as provided under Article 80 to 83 of the Constitution.

The Public Finance Management Act, 2019 was enacted on June 30, 2019, to provide for regulating the custody of the federal consolidated fund, the payment of money into that fund, the withdrawal of money therefrom, the custody of other money received by or on behalf of the federal government, their payment into, and withdrawal for, the public account of the federation.

Originally published in The News