ISLAMABAD: With the imposition of additional taxation measures of Rs170 billion, including raising the GST rate from 17 to 18 percent through a mini-budget, the FBR is facing a revenue shortfall of approximately Rs304 billion for materialising the nine-month (July-March) collection target.
The FBR will have to materialise tax collection of Rs2,584 billion in the last three remaining months (April-June) of the current fiscal year. On an average, the FBR will have to collect around Rs860 billion a month in a three-month period for achieving the desired tax collection target of Rs7,640 billion by June 30, 2023.
However, the FBR’s monthly targets were not fixed on an average basis, so the burden of increased tax collection will lie on the shoulders of tax officials in the last month of June 2023 to materialise the tax collection target.
The provisional revenue collection figures of March 2023 show that the FBR faced a shortfall of Rs64 billion in achieving the desired tax collection target. The Board has achieved tax collection of Rs663 billion in March 2023 against the revised assigned target of Rs727 billion. “In the wake of imports compression, the FBR has faced substantial revenue shortfall in achieving both nine-month as well as March tax collection target of the current fiscal year,” said one top official of the FBR on Friday night. The FBR used to collect almost Rs40 billion to Rs50 billion revenues at import stage through various taxes.
With a massive decline in the current account deficit where it stood at just $64 million for the last month mainly through import compressions, it has resulted in impacting the tax growth negatively.
It is yet to be seen how the IMF responds to such mammoth revenue shortfall for the nine months of the current fiscal year in ongoing efforts of the government for reviving the stalled Fund programme under the $6.5 billion Extended Fund Facility (EFF). The FBR has provisionally fetched tax revenues of Rs5,156 billion in the first nine months of the current fiscal year against the assigned target of Rs5,460 billion for July-March (2022-23), reflecting a revenue shortfall of Rs304 billion. Now the FBR will have to collect Rs2,584 billion in the last quarter (April-June) period in order to display the revised tax collection target of Rs7,640 billion on June 30, 2023.