OUR STAFF REPORTER LAHORE The government has traced over 2.3 million non-taxpayers in the country, which would be brought to the tax net. While out of 2.3 million, the FBR would issue notices to 0.7 million non-taxpayers in the upcoming financial year 2011-2012. This was stated by Ansar Javed, Chief Commissioner Inland Revenue, during the post-budget seminar organised by the ICMAP here. The other speakers who spoke at the Institute of Cost and Management Accountants of Pakistan (ICMAP) seminar included Shahzad Awan Member National Council of ICMAP, Abdul Razzaq Member of tax committee LCCI, Mian Muhammad Ramzan Tax Consultant and FCMA, Zia ul Mustafa Awan Hon. Secretary Institute of Cost and Management Accountants of Pakistan (ICMAP), Aamir Ijaz Khan Chairman Lahore Branch Council ,Muhammad Yasin Secretary Lahore Branch Council and Abid Lateef Lodhi Vice Chairman Lahore Branch Council. Talking about the revenue collection target of Rs1,952 billion, Ansar Javed said that the target is realistic and made on the basis of Rs1,580b, while some Rs280 billion would come through nominal growth of 18 per cent and rest of the revenue would be generated through administrative measures. He was of the view that FBR would face Rs27 billion shortfall, as in case of relief given and revenue generation measures for the upcoming financial year. He said that FBR is aiming to collect more than Rs50 billion due to the administrative measures in the department including Rs25 billion from audit of withholding agents. The government is expecting to generate Rs81 billion through taxation measures taken in March that includes elimination of tax exemptions of fertilizers, pesticides and others, he maintained. He was of the view that FBR is expecting that pending cases in the courts would resolve soon as cases worth of Rs131 billion in pending. The break-up of Rs 1,952 billion revealed that, Rs 743.60 billion would come through direct taxes against Rs 626.90 billion of the outgoing year and Rs 1330.58 billion as indirect tax against Rs. 1,05246b of the year 2010-11. The break-up of indirect taxes shows that Rs 206.40 billion is estimated through customs duty against Rs 173.30 billion, Rs 836.70 billion as sales tax against Rs 654.60 billion, Rs 165.60 billion as Federal Excise Duty against Rs 132.90 billion, Rs 120 billion as petroleum levy against Rs 90 billion, Rs 1.81 billion as other taxes against Rs 1.59 billion and Rs 75 million as airport tax against the Rs 71 million of the outgoing fiscal year. Shahzad Ahmad Awan Member National council of ICMAP argued the budget was full of presumptive taxes and the unjust policy of relying on indirect taxation had continued over the past nine years. The Federal Budget is prepared in accordance with the Budgeting & Accounting Classification System (ACS) as approved by the GOP as integral part of the new accounting model. A new budget preparation method, called the Output Based Budgeting has been introduced which represents the Federal Budget by Services and effects of services on target population link with Performance Indicators & Targets over the three years period. Hon. Secretary Institute of Cost and Management Accountants of Pakistan (ICMAP) Zia ul Mustafa Awan said Pakistans tax setup was more pro-rich than pro-poor. Resultantly, the rich paid less tax than they should and poor were compelled to pay taxes in spite of the fact that they had a very low capacity to pay. Member Tax Committee Lahore Chamber of Commerce and Industry (LCCI) Abdul Razzaq said the most tax efficient form to do business, other than individual, was the creation of an association of persons (AOP) because the starting rate in case of AOP was 0.5 percent with exemption limit of Rs100,000. Due to these incentives, the growth rate of AOPs was 60.6 percent in tax year 2009.On the basis of this growth rate, the focused person of the budget 2010-11 was AOP. AOP was targeted in four ways. Mian Ramzan, FCMA labelled the indirect taxation regime against the economic principles and against principles of equality. He added that due to failure of tax collecting machinery, for the last many years, Govt. has been collecting tax revenues through indirect taxes as short cut measures. Even more than 50 percent of Income Tax is being collected through withholding tax regime, a form of indirect taxation, which is against the basic principles of direct taxation. Imposing indirect taxation means that taxing all equally which should not the motive of any welfare state. Salman 21-6-2011