35 per cent growth needed to achieve Rs5,500 revenue target

ISLAMABAD: The federal cabinet on Tuesday approved Budget Strategy Paper (BSP) for next budget 2019-20 by envisaging fiscal deficit at over 6 percent of GDP and FBR’s collection target of Rs5,550 billion.

The FBR’s tax collection target for the outgoing fiscal year was revised downward from Rs4,398 billion to Rs4,150 billion till end June 2019. “The FBR requires growth of 35 percent for achieving a challenging target in the next budget,” said top official of the government while talking to The News after the cabinet meeting here on Tuesday. The government has envisaged GDP growth target at 4 percent and inflation at 8.5 percent for the next fiscal year. Finance Ministry’s spokesman/advisor Dr Khaqan Hasan Najeeb stated in his tweet on Tuesday that Dr. Hafeez Shaikh and the economic team held an in-depth review of the draft Budget Strategy Paper today. It is being ensured that the Strategy contains all steps needed for achieving macro- economic stabilization and putting the country on a sustainable growth path

However, the FBR’s former member Shahid Hussain Asad on Tuesday told The News that he did not know why and on what basis a target of 5550 billion was given to FBR, when it may hardly collect 4000 billion this year. With GDP growth at 4% and inflation of 8.5% give a natural growth of 520 billion, meaning thereby that tax measures of around 1000 billion will be required. “That would kill the already very fragile Economy”, he added.

He said that there is need to advice the government to give first priority to improve economy. Once the economy is booming, tax would flow automatically as tax is the dividend of economy, he added.

He said there is need to use lateral entry system and put best people from private sector as secretary to head ministries of Finance, Industry, Commerce and Petroleum and their related organizations. Instead of revenue collection first priority of the government should be improving economy rather than managing to get more and more loans and increasing national debt.

For improving efficiency of FBR, you need to use A1 Information Technology System.

Training academies should not be parking place for unwanted officers. They should be trained to work themselves rather than depending on their Inspectors and Auditors. Levying too much taxation, he said, will further destroy already weak and fragile economy. Second thing is convincing the society to adopt Simplicity, because we have become too spendthrift and all of us have adopted a style of life which is beyond means of almost everybody, he concluded.