Rs355b revenue shortfall stares FBR

ISLAMABAD: At a time when the IMF and Pakistani authorities are making all-out efforts to strike a staff level agreement on a possible $6.4 billion package, the FBR has been facing massive revenue shortfall of Rs355 billion in the first 10 months (July-April) of the current fiscal year.

Without moving ahead with the Tax Amnesty Scheme, the maximum collection could go up to Rs3,940 billion till June 30, 2019 indicating that the FBR is going to face a massive shortfall of Rs460 billion in the outgoing financial year.

The FBR’s collection stood at Rs2,983 billion in July-April period of the current fiscal year against the desired target of Rs3337.7 billion so the provisional shortfall ballooned to Rs355 billion so far. “We expect that the final revenue collection will bring a few billions more to the national kitty in next few days,” said the FBR sources while talking to The News on Tuesday night.

The FBR has collected Rs285 billion in accordance with provisional revenue collection figure for April 2019 against the fixed target of Rs339.7 billion. So the shortfall in the outgoing month stands at Rs54 billion.

The FBR requires to collect Rs1,415 billion to materialise its desired target on its board in last two months (May and June) 2019 that will be simply impossible to get at.

Now it’s becoming difficult for the tax machinery to achieve its envisaged annual collection target of Rs4,398 billion for the current fiscal year.

The fiscal woes of the PTI-led regime are increasing at a rapid pace as the budget deficit target even after revising upward twice from 5.1 to 5.6 percent and even 6.1 percent could not be achieved.

Independent economists fear that the budget deficit target is heading towards 7 percent of GDP for the current fiscal year.

In last ditch efforts to minimize the yawning gap on account of shortfall, the FBR is now making plans to net additional collection of Rs240 billion in the last two months through the proposed amnesty scheme.

Sharing reasons for massive tax shortfall, the official sources said tax reduction on POL products, LNG and furnace oil resulted into shortfall of Rs75 billion, jacking up income tax ceiling from Rs0.4 million to Rs1.2 million and reduction in taxes rates resulted into revenue loss of Rs35 billion, slashing down Public Sector Development Program (PSDP) caused loss of Rs55 billion.

They said suspension of tax on telecoms by the Supreme Court that was now restored had already caused a negative impact of Rs40 billion. Import compression reduced collection by Rs20 billion and others Rs15 billion so far in the current fiscal year.