It is encouraging to note that the revenue authorities have again reached a record 16 percent growth in the first four months of the fiscal year 2021-22 (July-October), thanks to the government for framing new strategies to increase the amount of revenue collection in order to keep the ongoing development work and financial activities afloat. Reportedly, the National Board of Revenue (NBR) has achieved the growth second time in a row which showed more than 16.47 percent revenue growth rate of income tax, value-added tax (VAT) and customs.
The government must devise prudent steps to raise revenue collection further to meet the huge expenses in the new year. Policymakers can raise revenues by modifying existing tax policy, enacting new taxes, and boosting economic activity. E-commerce sector can be one of the largest tax-collecting areas.
Policymakers can raise revenues by modifying
existing tax policy, enacting new taxes, and
boosting economic activity
But unfortunately, authorities concerned have not been able to establish any infrastructure system to collect revenue from online business sector. Hence, it is high time to build a highly skilled ICT wing in order to collect revenues from the ICT firms or services.
It needs no emphasising that in order to collect revenue from the ICT service based business firms NBR has to bring some necessary changes in its existing VAT rules. Firstly, NBR has to identify the challenges and barriers in the area.
As the revenue authority has no infrastructure in place to collect revenue from this area, they must build necessary infrastructure to collect revenues from e-commerce sector.
In this regard, the revenue board will need a highly skilled ICT wing aiming to collect revenues from the ICT firms or services. Also the government should formulate and implement new taxation law for e-commerce which will more clearly define the parameters of the e-commerce industry.