FBR collects Rs200 billion in July, up 20pc MoM

ISLAMABAD: The Federal Board of Revenue (FBR) has collected Rs200 billion in the first month (July 2017) of the current fiscal year 2017-18 against a collection of Rs164 billion in the same month of the last financial year 2016-17, registering a growth by 20 percent.  

“We have achieved the target of Rs200 billion for July 2017 with margin,” one top official of FBR confirmed to The News here on Monday.  

Till (Monday) afternoon, the FBR’s collection had crossed Rs183 billion in July this year against Rs164 billion collected during the same period of the last fiscal.    “The collection of over Rs200 billion shows the tax machinery did not collect advance tax in abundance in June 2017, the last month of the previous fiscal year,” said a senior official of the FBR while talking to The News.    

However, the FBR has been facing a daunting task for achieving highly ambitious tax collection target of Rs 4,013 billion for the ongoing fiscal year.  

Analysts said the country's fiscal woes have been worsening as the FBR is unlikely to achieve highly ambitious tax collection target of Rs4,013 billion for the current fiscal year mainly because of low base in last fiscal where the reconciled tax collection figure stood at only Rs3,360-3,362 billion.  

“We will finalise the tax collection figures till August 10, 2017 for the last fiscal year,” confirmed Dr Iqbal, FBR spokesman, while talking to The News. He said the FBR’s collection would cross its envisaged target of Rs200 billion for July 2017.  

One of the sources said instead of achieving the downward revised tax collection target of Rs3,521 billion, the FBR’s reconciled tax collection stood just at Rs3,360-3,362 billion for the last fiscal year 2016-17 that ended on June 30, 2017.  

“The FBR’s reconciled tax collection stood at Rs3,360 billion in accordance with AGPR and SBP data instead of revised tax collection target of Rs3,521 billion so achieving tax collection target of Rs4,013 billion simply seems unfeasible,” another source in the FBR confirmed to The News. 

With a projected base of Rs3,521 billion, the last budget makers had envisaged tax collection target of Rs4,013 billion or around 15 percent growth but with massive revenue shortfall, where the tax collection reduced by around Rs161 billion, so the FBR would have to slash down its envisaged target with the same proportions. 

In the wake of low base collection standing at Rs3,360 billion, the FBR will have to achieve a collection growth of over 20 percent instead of 15 percent for displaying the desired target of Rs4,013 billion for fiscal year 2017-18. 

“If the FBR does not reduce its tax collection target then the tax machinery will have to take additional taxation measures or put its house in order for achieving highly ambitious target in the fiscal year where political uncertainty will continue to hover over the political scene of the country,” the official added. 

The FBR’s tax collection was revised downward from Rs3,621 billion to Rs3,521 billion after holding parleys with the International Monetary Fund (IMF) on the pretext of reduced oil prices in international market, budgetary incentives, reduction of GST on fertiliser and export incentive package. However, the tax collection reduced significantly and stood at Rs3,360 billion. 

With low tax collection by the FBR, the economic managers are finding it really hard to curtail the budget deficit at around 5 percent of GDP for the last fiscal year. 

The finance ministry had not yet disclosed the figure of budget deficit but it might cross 5 percent of the GDP despite the fact that economic managers were running from pillar to post for maximising the non tax revenue target from possible avenues.