After failure to materialise the much controversial and much publicised “Tax Amnesty Scheme”, the cash-starved government is giving a serious thought to launch an alternate plan to steer the country out of looming economic crisis.The economic experts are of the view that the government’s fresh move would hardly meet the desired targets as against the expected revenue generation of well over Rs 100 billion through Tax Amnesty Scheme the plan ‘B’ of the government would barely fetch around Rs 10 to 15 billion, and that too after a long and tedious exercise.

Sources informed that government is unlikely to get approval of much criticized tax amnesty scheme from National Assembly due to the reservations of its major coalition partners i.e. PML-Q and MQM. Therefore, the government has started to consider other available options to generate revenue in remaining months (February-June) of the current fiscal year 2012-2013 in order to reach the revised revenue collection target and to reach the budget deficit target.

Sources said that under the alternative plan, the FBR would send notices to between 0.2 million and 0.5 million individuals during the ongoing financial year 2012-2013, directing them to pay taxes with penalties. The FBR has identified 3.1 million potential taxpayers who enjoy high consumption patterns but do not pay taxes. The alternative plan could not generate revenue as it was expected from tax amnesty scheme. However, issuing notices would be the tedious exercise.

The government has planned to generate Rs 100 billion from amnesty scheme that would help in reaching its revised tax collection target, as Federal Board of Revenue (FBR) is struggling to meet the target during the ongoing financial year 2012-2013. FBR has provisionally collected Rs 1003 billion during July-January of the year 2012-2013. FBR is facing shortfall of around Rs 100 billion in the first seven months of the current fiscal year.

Disapproval of proposed tax amnesty scheme would increase the maladies of the government, as Federal Board of Revenue is struggling to achieve the revised revenue collection target of Rs 2200 billion set for the ongoing fiscal year keeping in view the progress of the tax department so far. The FBR recently informed the International Monetary Fund (IMF) that revenue collection would be around Rs 2,200 billion by end June 2013. Earlier, the government had projected a revenue collection target of Rs 2, 381 billion for 2012-13.

The country’s budget deficit target would increase by 0.8 per cent if revenue collection target reduced to Rs 2200 billion from earlier Rs 2381 billion set for the current fiscal year. As a result of this shortfall, it is expected to jack up budget deficit to an unmanageable level. Budget deficit could go in the range of 6.5 to 7 per cent of the GDP in the ongoing financial year. The IMF, on other hand, had predicted that the budget deficit would increase to seven to 7.5 percent of GDP in FY13.

It is worth mentioning here that under the much controversial tax amnesty scheme, one could whiten one’s black money and assets at home and abroad within three months against a onetime nominal charge.