Revenue Structure, PAKISTAN

  Revenue Structure

A tax is a financial charge or other levy imposed upon a taxpayer (an individual or legal entity) by a state or the functional equivalent of a state such that failure to pay is punishable by law. Taxes are also imposed by many administrative divisions. Taxes consist of direct or indirect taxes and may be paid in money or as its labor equivalent.

The term direct tax generally means a tax paid directly to the government by the persons on whom it is imposed

The term indirect tax has more than one meaning. In the colloquial sense, an indirect tax (such as sales tax, a specific, value added tax (VAT), or goods and services tax (GST)) is a tax collected by an intermediary (such as a retail store) from the person who bears the ultimate economic burden of the tax (such as the consumer). The intermediary later files a tax return and forwards the tax proceeds to government with the return.

Income is the consumption and savings opportunity gained by an entity within a specified timeframe that is generally expressed in monetary terms. However, for households and individuals, "income is the sum of all the wages, salaries, profits, interests payments, rents and other forms of earnings received... in a given period of time.

Tax revenue is the income that is gained by governments through taxation.

An income tax is a tax levied on the income of individuals or businesses (corporations or other legal entities). Various income tax systems exist, with varying degrees of tax incidence. Income taxation can be progressive, proportional, or regressive. When the tax is levied on the income of companies, it is often called a corporate tax, 

Types

Personal

A personal or individual income tax is levied as a percentage of a person's wages and salaries, with some deductions permitted, along with the net income or loss from businesses and investments. It is typically collected on a pay-as-you-earn basis, with corrections at the end of the year for over payments and under payments.

Corporate

Corporate tax or company tax refers to a tax imposed on entities that are taxed at the entity level. Such taxes may include income taxes, capital gains taxes, or other taxes. The tax systems of most countries impose an income tax on certain types of entities (company or corporation).

Capital gains tax

A capital gains tax is levied on profits from the sale of capital assets (e.g., real estate, machinery, stocks, bonds, art, and commodities

A property tax (or millage tax) is a levy on property that the owner is required to pay. The tax is levied by the governing authority of the jurisdiction in which the property is located; it may be paid to a national government, a federated state, a county/region, or a municipality.

                                                    

                                      Federal Board of Revenue

The Central Board of Revenue (CBR) was created on April 01, 1924 through enactment of the Central Board of Revenue Act, 1924. In 1944, a full-fledged Revenue Division was created under the Ministry of Finance. After independence, this arrangement continued up to 31st August 1960 when on the recommendations of the Administrative Re-organization Committee, FBR was made an attached department of the Ministry of Finance. In 1974, further changes were made to streamline the organization and its functions. Consequently, the post of Chairman FBR was created with the status of ex-officio Additional Secretary and Secretary Finance was relieved of his duties as ex-officio Chairman of the FBR.

In order to remove impediments in the exercise of administrative powers of a Secretary to the Government and effective formulation and implementation of fiscal policy measures, the status of FBR as a Revenue Division was restored under the Ministry of Finance on October 22, 1991. However, the Revenue Division was abolished in January 1995, and FBR reverted back to the pre-1991.

FUNCTIONS OF FBR/REVENUE DIVISION

In the existing setup, the Chairman, FBR, being the executive head of the Board as well as Secretary of the Revenue Division has the responsibility for (i) Formulation and administration of fiscal policies, (ii) Levy and collection of federal taxes and (iii) Quasi-judicial function of hearing of appeals.  His responsibilities also involve interaction with the offices of the President, the Prime Minister, all economic Ministries as well as trade and industry.

FBR Vision

“To be a modern, progressive, effective and Credible organization for optimizing Revenue by providing quality service

FBR Mission

Enhance the capability of the tax system to collect due taxes through application of modern techniques, providing taxpayer assistance and by creating a motivated, dedicated, professional work force.

FBR Value

Ø  Integrity

Ø  Teamwork

Ø  Fairness

Ø  Professionalism

Ø  Courtesy

HOW Government generate income;

 Government generates income by the following resources;

Non-tax revenue or non-tax receipts are government revenue not generated from taxes. Examples include:

(1) Aid from another level of government (intergovernmental aid) - for example, (foreign aid)

(2) Revenue (including interest or profit) from investment funds (collective investment schemes),  sovereign wealth funds, or endowments.
(3) Revenues from sales of state assets
(4) Rents, concessions, and royalties collected by the state when it contracts out the right to profit          from some good or service to a private corporation. An example are contracts for resource extraction (for such natural resources as minerals, timber, petroleum and natural gas, or marine resource)
(5) Fines collected and assets for featured as a penalty. Examples include parking fines, court costs levied on criminal offenders 
(6) Fees for the granting or issuance of permits or licenses. Examples include vehicle registration plate permits, vehicle registration fees, watercraft registration fees, building fees, driver's licenses, hunting and fishing licenses, fees for professional licensing, fees for visas.
(7) User fees collected in exchange for the use of many public services and facilities. Tolls charged for the use of toll roads are an example 
(8) Donations and voluntary contributions to the state

        

To conclude we can say that tax is like a blood of countries’ economy if everyone would pay the tax according to law then government would have more money to facilitate people in the form of education, health,infra structure, security etc and the dependence of government on foreign loans and aids will also decrease

Government should also take steps to ensure the tax payments without any favor and discrimination. Government should also cut down unnecessary spending in this way Pakistan’s economy will get stronger.