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No compromise on FY2019 revenue target, says FBR chief

February 13, 2019

KARACHI: The Federal Board of Revenue (FBR) Chairman Jehanzeb Khan on Tuesday directed tax officials to ensure achievement of the revenue collection target of the current fiscal year of 2018/19 through facilitating taxpayers and use of technology, during his maiden visit after assuming the charge.

The FBR chairman, during a daylong visit, met commissioners of Inland Revenue and collectors of Pakistan Customs to discuss the revenue collection strategy during the remaining months of the current fiscal year.

The sources, who attended the meeting, said the FBR chairman told the officers that they should not compromise on revenue collection targets.

The FBR collected Rs2.060 trillion in tax revenue during the first seven months of the current fiscal year of 2018/19, slightly up 3.26 percent year-on-year.

The revenue collection was still showing a shortfall of Rs190.25 billion compared with the target of Rs2.251 trillion for the period under review.

The sources said the FBR urged the ministry of finance to revise downward the collection target of Rs4.398 trillion for the current fiscal year.

The new government led by Pakistan Tehreek-e-Insaf has already revised up budget deficit estimate to 5.6 percent of GDP for FY2019. It would bet on privatisation of re-gasified liquefied natural gas-based power plants, proceeds from spectrum licences and new revenue measures to contain the fiscal deficit, which is feared to increase to seven percent this fiscal year from 6.6 percent in the last fiscal year.

The meeting discussed the fall in revenue collection owing to various factors, including slowdown in disbursement for development projects, lower sales tax rates on petroleum products and measures to facilitate export and manufacturing sectors.

Sales tax and federal excise duty collection from imports declined to Rs338.4 billion during the first half of the current fiscal year from Rs339.3 billion a year earlier. Officials at the Large Taxpayer Unit Karachi – the biggest revenue collection arm of the FBR – said lower rates of sales tax on import of petroleum products resulted in fall of revenue collection at the import stage. The officials said the government cut sales tax in order to provide relief to the masses on higher international oil prices.

The chairman told the officers that FBR would propose an award mechanism on achievement of revenue collection target in the upcoming federal budget.

Khan further said the transfers and postings in the apex revenue body would be based on merit. He said the FBR would keep merit, efficiency and performance of officials under consideration for their promotions.

The sources said the chairman reviewed the revenue collection by the Inland Revenue offices in Karachi and expressed satisfaction over the department’s performance.

The FBR chief informed the meeting about the reform agenda of the FBR. He said the FBR is focusing on improving use of information technology to expand the tax net.

The chairman asked the officials to facilitate the existing taxpayers and make efforts to broaden the tax base and enhance tax-to-GDP ratio.

The chairman later addressed the staff and officials of the Inland Revenue to encourage them in the ongoing efforts for revenue collection.

It was the first visit of Jehanzeb Khan as FBR chairman to Karachi.

The chairman also visited Customs House, Karachi for reviewing collection at import stage, including customs duty, sales tax and income tax.

Member Inland Revenue Operation Seema Shakil and other senior officers also accompanied FBR chairman during his visit.