ISLAMABAD - As the financial year ran out on June 30 (Monday), statistics revealed the Federal Board of Revenue (FBR) has failed to achieve its twice-revised revenue collection target by Rs 15 billion set for 2013-2014 despite taking additional tax generation measures.
Sources informed that FBR has provisionally collected Rs 2260 billion by the end of June 2014 as against the target of Rs 2275 billion, leaving a shortfall of Rs 15 billion. The government had twice revised the revenue collection in a single year. The sources further informed that FBR has collected Rs 305 billion in June 2014 against the target of Rs 320 billion in the said month.
The Federal Board of Revenue (FBR) has taken some additional taxation measures to reach the twice-revised tax collection target of Rs 2275 billion. Under the additional taxation measures, the FBR had asked the companies, association of persons and individuals to pay their quarterly installment of advance income tax before June 16 this year. The FBR had projected to collect upto Rs 40 billion through advance income tax of the first quarter (July-September) of next financial year 2014-2015.
Similarly, the FBR had also started implementing taxation measures announced in budget through Statutory Regulatory Orders (SROs) prior to its approval from the parliament apparently to generate additional revenue. FBR also issued SRO 420 to impose 17 percent sales tax on imported leather goods and garments. Through SRO 421, the FBR increased sales tax on steel melters and re-rollers to Rs7 per electricity unit, up from Rs4. It also increased sales tax on supply of ship plates to Rs6,700 per ton from Rs5,862.
The PML-N government had revised the revenue collection target twice in the previous financial year 2013-2014 that ended on Monday. The incumbent government had set an ambitious tax collection target of Rs 2475 billion on the eve of budget 2013-2014, which was termed as unrealistic the by economists and International Monetary Fund at the outset of the financial year.
The government had first revised the revenue collection target in February 2014 to Rs 2345 billion from budgetary target of Rs 2475 billion, as on that time Finance Minister Senator Ishaq Dar held the previous FBR team responsible for downward revising target.
"The previous FBR's team gave me assurance of achieving Rs 2050 billion by the end of 2012-2013, which was made as base for tax target of Rs 2475 billion. However, the FBR ended on Rs 1940 billion that eroded the tax base", the Finance Minister said in last meeting of Senate Standing Committee on Finance and Revenue in June 2014.
However, later, the government in May 2014 had once again downward revised the tax collection target to Rs 2275 billion from Rs 2345 billion. Interestingly, the Finance Minister once again did not accept the responsibility of failing in achieving the target. Ishaq Dar said that sharp rupee appreciation, which is on one side hand positive impact on economy but on second hand it reduced imports resulting in lesser revenue collection.