FBR faces Rs118 bn shortfall in tax collection till Dec 2019

ISLAMABAD: Despite making downward revision in annual tax collection target, the FBR has faced revenue shortfall of Rs118 billion in achieving the revised target of Rs2,198 billion for the first half (July-Dec) period of the current fiscal year.

The FBR’s annual target was envisaged at Rs5,503 billion that was revised downward to Rs5,238 billion. So the annual target was slashed down by Rs265 billion with the permission of IMF. It also resulted in slashing down the FBR target forthe first half (July-Dec) period of the current fiscal year to Rs2,198 billion. The FBR has collected Rs2,080 billion against the envisaged target of Rs2,198 billion, witnessing a shortfall of Rs118 billion.

The FBR has once again extended the date of filing of tax returns up to January 31, 2020. The FBR has so far received around 2,150,000 tax returns in the current fiscal while it received returns of 1,560,000 in the last financial year. In totality, the FBR had received around 2.7 million returns last year, so the date of filing has been extended to cross this target till January 31, 2020.

However, FBR Chairman Shabbar Zaidi in his tweet on Tuesday night stated “Alhumdulillah FBR has collected Rs2,080 billion by this time for the half year ended December 31, 2019. This is higher by 16 percent over the last year for the same period”.

The FBR did not explain that under the IMF arrangement, the desired revised tax collection target for the first half stood at Rs2,198 billion but the FBR managed to collect Rs2,080 billion, witnessing a shortfall of Rs118 billion.

The FBR so far collected Rs2,080 billion in the July-Dec period of 2019-20 against collection of Rs1,779 billion in the same period of the last financial year. It indicates that the FBR had collected Rs301 billion more in the first six months of the current fiscal year. In December 2019, the FBR was assigned to collect Rs581 billion but the Board fetched Rs463 billion so the shortfall stood at Rs118 billion.

The FBR had collected Rs1,617 billion in first five months (July-Nov) period of the current fiscal year against initially envisaged target of Rs1,828.4 billion in accordance with the annual target of Rs5,503 billion. When the annual target was slashed the end December target was also revised downward so the FBR was assigned to touch collection figure of Rs2,198 billion till December 31, 2019. Now the FBR will have to collect Rs3,158 billion in the second half (Jan-June) period of FY2020 in order to materialise the desired revised target of Rs5,238 billion till June 30, 2020.

At the existing pace, the FBR could go up to Rs4.5 trillion or Rs4.6 trillion maximum, so the FBR will have to adopt innovative approach to materialise its revised target. In the first quarter of the current fiscal year, the non-tax revenue target has helped the FBR to get smooth sailing but the poor performance of FBR will continue haunting the overall fiscal performance under the IMF arrangement on quarterly basis.

On the other hand, the FBR launched its campaign to seal those premises of tier-1 retailers, restaurants in federal capital that were not willing to install Point of Sale at their premises. The FBR team raided a posh area of Islamabad at Kohsar market and directed renowned restaurants to install POS or their premises would be sealed. This operation continued for hours during which three renowned places were sealed while those were facilitated where they showed willingness to install software Point of Sale for connecting their sale receipt with the system attached with the FBR electronically.