FBR expedites tax recovery drive to meet Rs661bln revenue shortfall

KARACHI: The Federal Board of Revenue (FBR) has speeded up tax recovery drive to meet a gigantic revenue shortfall of Rs661 billion for the current fiscal year ending June 30, officials said on Monday.

The officials said the FBR would take ‘harsh’ measures, including tax recovery through bank accounts’ attachment and arrests, to achieve the revenue collection target of Rs3.935 trillion for FY2018. The apex tax authority managed to collect Rs3.274 billion during the first 11 months of the current fiscal year.

Sources in Large Taxpayers Unit (LTU) Karachi said the revenue collection task has become more difficult as half of the last month was consumed in Ramazan and Eid holidays.

“In the remaining 12 days, the FBR offices will freeze bank accounts, make arrests and impose fine and penalties,” said an official at LTU said.

The official said the bulk of the amount would be received from corporate and association of persons who would deposit advance tax for the fourth quarter. Similarly, the FBR is hopeful of generating substantial amount from ongoing amnesty schemes for foreign and domestic undeclared assets, the official added.

The official said the recovery of regulatory duty, which was legalised trough Finance Act 2018, and new budgetary measures would also help in boosting collection.

“The FBR is estimating Rs35 billion in collections from the amnesty schemes,” the official said. An amount of Rs10 billion may be collected in the remaining days of the current fiscal year. People are expecting extension in deadline for amnesty schemes beyond June 30. In April, the last government announced one-time tax amnesty schemes to allow declaration of local and foreign assets at concessional rates. The schemes would expire on June 30.

The FBR has already cancelled leaves of tax officials till June 30 in order to ensure maximum revenue collection for the outgoing fiscal year, the official said.

The FBR collected Rs3.361 trillion during the fiscal year of 2016/17 and alone in the last month of June, it had managed to collect Rs507 billion.

“Considering the current pace of 15 percent growth in revenue collection, the FBR may be able to collect Rs580 billion in the last month bringing the final tally up to Rs3.854 trillion,” an official said.

Tax officials said the caretaker government is keen to achieve the revenue collection target in order to avoid expansion of budget deficit as any shortfall would create difficulties for the new government.

Ministry of finance estimated that the budget deficit for the current fiscal year between 5.3 and 5.5 percent of GDP.

The country’s budget deficit peaked to 5.8 percent in the last fiscal year of 2016/17 against the envisaged target of 4.1 percent because of the FBR’s inability to generate desirable revenues and overspending by the provinces.