FBR collects Rs1,157 billion in first half of current fiscal year

ISLAMABAD: The FBR has collected Rs1157 billion during first half (July-Dec) period of the current fiscal year against a collection of Rs1031 billion in the same period of last financial year, registering a growth of 12.2 percent.
According to provisional revenue collection figures for December 2014, the Federal Board of Revenue (FBR) has collected Rs253 billion against the envisaged target of Rs283 billion. The FBR is facing a revenue shortfall of Rs30 billion just for December 2014. The FBR had collected Rs231 billion in December last year 2013.
In order to mitigate negative impact of reduced oil prices, the government jacked up GST rate from 17 percent to 22 percent with effect from January 1, 2015 in order to collect Rs20 billion additional revenues during the remaining months of the ongoing fiscal year. For whole 12 months, the FBR has estimated to collect Rs40 to 50 billion with the help of increasing GST rate on POL products.
The IMF had already projected downward revision in FBR’s annual tax collection target from Rs2810 billion to Rs2756 billion for the current fiscal year. The FBR had collected Rs2266 billion in last fiscal year and tax machinery required a growth of over 25 percent to touch the desired figure of Rs2810 billion for the current fiscal year.
Keeping in view performance of tax collection machinery for first six months of this fiscal year, it will be hard for the FBR for achieving revised tax collection target of Rs2756 billion for 2014-15. Although, the FBR has not yet officially revised downward its annual envisaged target of Rs2810 billion but the netting of revenue up to Rs2756 billion should be considered an achievement on part of the FBR’s machinery.
The independent economists argue that the FBR’s collection will be standing at Rs2550 billion to Rs2600 billion for the current fiscal year maximum so fiscal adjustments will have to be made to keep the budget deficit target within the limit agreed with the IMF at 4.9 percent of GDP.
However, the FBR high-ups say that the tax machinery would cross Rs2700 billion mark during the current fiscal year. The strategy will be devised to gear up revenue collection in the second half of the ongoing fiscal year.