ISLAMABAD: The FBR is facing revenue shortfall of Rs163.5 billion in first four months (July-Oct) period of the current fiscal year as the provisional revenue collection stood at Rs1283.5 billion against desired target of Rs1,447 billion.
FBR Chairman Shabbar Zaidi stated in his tweet on Thursday that FBR has collected Rs320 billion during the month of October 2019 and maintained overall increase of 16 percent over last year. The domestic taxes went up by 25 percent, he added. “This is after taking into account negative aspect of import compression of Rs50 billion,” he maintained.
However, the government has been left with no other option but to revise downward the annual tax collection target from Rs5,503 billion mainly because of imports compression as it decreased by $400 million in October 2019, the analysis done by the FBR and shared with this scribe in background discussions to ascertain reasons for revenue shortfall. The government is going to request the visiting IMF mission to reconsider the FBR’s annual target, which was set on the basis of five-point formula including GDP growth rate, CPI based inflation, exchange and discount rates and finally import figures. If the import compression had done substantial loss, the revenue collection target could also be rationalised.
“The government has opted a strategy to convince the IMF team that the primary balance target will remain unchanged so FBR target should be reduced while non-tax revenue target should be jacked up to keep primary balance target of 0.6 percent of GDP unchanged,” said the official sources.
In the outgoing month (October 2019), the FBR has collected Rs320 billion against the desired target of Rs376 billion indicating a revenue shortfall of Rs56 billion just in last one month. The FBR had collected Rs963.5 billion in first three months of the current fiscal year against the set target of Rs1,071 billion thus faced a shortfall of Rs108 billion. Now after incorporating the figure of October the overall revenue shortfall climbed to Rs164 billion in first four months of the current fiscal year.
It’s becoming evident that the FBR will not be able to materialise its annual tax collection target of Rs5,503 billion in the current fiscal against Rs3,829 billion in the last financial year so the FBR requires a growth of 44 percent.
The FBR has also extended deadline for filing of income tax returns up to November 30, 2019. The FBR official said that the FBR so far received around 1.1 million income tax returns during the current fiscal year against 6,50,000 in the same period of the last financial year.