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Sunday April 21, 2024

FBR faces shortfall of Rs33bn in February

FBR is facing a revenue shortfall of Rs33 billion in the outgoing month (February 2024) as the tax machinery fetched revenues of Rs681 billion against the assigned target of Rs714 billion

By Mehtab Haider
March 01, 2024
This image released on March 3, 2022, shows the FBR building. — Facebook/Federal Board of Revenue
This image released on March 3, 2022, shows the FBR building. — Facebook/Federal Board of Revenue

ISLAMABAD: Amid the deafening drum beating by the caretakers for showing an improved fiscal performance, the Federal Board of Revenue (FBR) is facing a revenue shortfall of Rs33 billion in the outgoing month (February 2024) as the tax machinery fetched revenues of Rs681 billion against the assigned target of Rs714 billion.

However, the FBR has claimed that it has achieved the tax collection target for the first eight months (July-Feb) period of the current fiscal year. According to a tweet of the FBR on Thursday, the FBR has surpassed eight-month target of Rs5,829 billion and registered a growth of 30 per cent. During February 2024, the FBR collected Rs681 billion against Rs519 billion collected during February 2023, registering a growth of 32 per cent.

It was the second consecutive month when the FBR faced revenue shortfall in achieving monthly revenue collection target. The FBR’s shortfall increased in February 2024 when the Caretaker Minister for Finance Dr Shamshad Akhtar put her all out efforts to restructure the board.

This restructuring plan was blocked by the Election Commission of Pakistan.

Now the Islamabad High Court has given its observation while adjourning the case for next hearing, stating whether this restructuring is required or not shall be decided by the new government. This will be policy decision of the next government, so let the next cabinet decide it, the court observed.

The sources said the FBR would have to collect Rs3,586 billion tax revenue during the remaining four months (March-June) period of the current fiscal year, which would be a gigantic task for the tax collection machinery. The IMF is all set to kickstart parleys for completion of the second review and release of third tranche under $3 billion Standby Arrangement (SBA) program soon after the formation of government in Islamabad in the first week of March 2024.

In case of any further shortfall, the IMF may come up with prescription of additional revenue measures within the ongoing fiscal year.

The government has so far identified eight contingency revenue measures to generate additional revenue of Rs18 billion per month during 2023-24 in case the monthly FBR revenue falls short of the projected targets during 2023-24.

In January 2024, the FBR had suffered a shortfall of Rs9 billion. This is the second consecutive month the FBR is facing a shortfall in tax collection during the current fiscal year.