FBR faces Rs60 bn shortfall against 352 bn target

ISLAMABAD: The Federal Board of Revenue (FBR) faces Rs60 billion revenue shortfall to achieve the envisaged monthly target of Rs352 billion for August 2019, as it has fetched Rs292 billion so far.

The provisional revenue collection figures disclosed on Friday that the FBR collected Rs576 billion in first two months (July and August 2019) against the desired target of Rs644 billion, witnessing a shortfall of Rs68 billion during the period.

In August 2019, the FBR achieved net growth of 17.5 percent as domestic taxes including Income Tax, Sales Tax (domestic) and Federal Excise Duty (FED) achieved growth of 30 percent in revenues collection but tax collection at import stage nosedived witnessing a negative growth of 16 percent.

The import compression has negatively impacted our revenue collection efforts, said the FBR officials. Putting aside the reconciliation issues between the FBR and State Bank of Pakistan, the tax collection machinery is facing shortfall in the current fiscal year mainly because of import compression as in the outgoing month of August 2019 the provisional data is showing that revenue at import stage witnessed a negative growth of 16 percent. For July 2019, the difference in revenue collection stood at Rs17 billion as the FBR reported its collection of Rs284 billion, while the SBP showed collection of Rs267 billion.

The FBR high-ups claimed that this reconciliation would be done by end December 2019. Under the IMF programme, the government has agreed to achieve annual revenue collection of FBR to 5,550 billion in the current fiscal year 2019-20 against a collection of Rs3,829 billion. This indicates that the FBR will have to collect additional Rs1,721 billion for achieving the desired target by end of the ongoing fiscal year. This requires growth of over 44 percent.

In such circumstances, the IMF has given first quarter target to the tune of Rs1,072 billion for July-September period which means that the FBR will have to collect Rs496 billion in September 2019 to display the agreed revenue collection target.

Talking to this reporter a couple of days back, Chairman FBR Shabbar Zaidi said the FBR’s target for August 2019 was less than Rs350 billion and not Rs378 billion. Revenue collection, he said, had impacted because of almost 10 holidays in the outgoing month because of Eidul Azha. However, the revenue collection would be improved, he added.

FBR’s Member Inland Revenues (IR) Policy Dr Hamid Ateeq Sarwar Friday evening said they were making efforts to cross Rs600 billion mark for first two months as certain amount of revenue was still in the pipeline.

He said the FBR envisaged to achieve 19 percent growth in revenue for the first quarter till end September so efforts were underway to cross the one trillion mark by end of the first three months.

The bulk of tax amounts, he said, would be deposited into the national kitty in September so it was hoped that revenue collection would improve. Sources said the FBR would have to improve valuation system and curb smuggling to maximize collection in remaining months of current fiscal.