FBR’s revenue collection up 2.5pc in July-March

KARACHI: The Federal Board of Revenue (FBR) provisionally collected Rs2.690 trillion during the first nine months of the current fiscal year of 2018/19, marginally up 2.47 percent over the corresponding period a year earlier, according to an official data that indicated the tax authority ought to collect over Rs1.7 trillion to hit the annual revenue target.

The FBR collected Rs2.627 trillion in the July-March period of the last fiscal year.

The FBR counted on Rs30 billion collected under the tax amnesty scheme last year. If the amount were excluded then the total collection would come at Rs2.655 trillion.

Pakistan Muslim League (Nawaz)-led government introduced a tax amnesty for undeclared foreign and domestic assets in April 2018. The amnesty was initially approved till June 2018. It, however, was extended for another month by the caretaker government till July 31, 2018.

The ministry of finance, in the fiscal policy statement for 2018/19, said the collection under the amnesty scheme till June 30, 2018 was around Rs90 billion.

FBR sources said total collection under the scheme was Rs120 to 125 billion.

The FBR needs another Rs1.708 trillion during the last quarter to reach annual collection target of Rs4.398 trillion.

The FBR was able to collect Rs1.214 trillion in the last quarter of the last fiscal year of 2017/18, clearly depicting that the FBR needs around 41 percent growth in revenue in the remaining three months of FY2019 over the corresponding quarter of FY2018.

The growth in collection, during the first quarter of FY2019, was 8.79 percent. It fell to 4.32 percent during the second quarter and further declined to 2.47 percent in the third quarter.

The sources said if such a growth pattern continues in the last quarter then it would be difficult for the FBR even to reach the last fiscal year’s revenue collection of Rs3.842 trillion.

The FBR, in a presentation to the finance ministry, has already projected a revenue shortfall of Rs434.25 billion for the current fiscal year after the February collection due to numerous setbacks in the revenue collection. The FBR projected an annual collection at Rs3.964 trillion for FY2019.

The sources said the tax collection for March 2019 showed further widening of gap. The FBR provisionally collected Rs351 billion in March 2019 against the assigned target of Rs432 billion, reflecting a shortfall of Rs81 billion. It was lower than the collection of Rs370 billion in March 2018.

The sources said the FBR faced a setback in collection of advance tax during March. Companies pay advance tax every quarter on the basis of their assumed income. The lower collection was due to fall in profitability of corporate sector.

The corporate sector will pay its fourth installment of advance tax in June. The sources said the June collection would not be as per the expectations considering the economic slowdown.