ISLAMABAD - The PML-N government has faced an economic setback as Federal Board of Revenue (FBR) has missed the revenue collection target for April by a huge margin of Rs 30 billion, making annual revised tax target difficult to achieve.
The FBR has accumulated Rs 167 billion in the month of April 2014 against the target of Rs 197 billion. “The FBR has collected Rs 1743 billion during ten months (July to April) of the ongoing financial year 2013-2014 as against Rs 1509 billion of the corresponding period of last year, registering a growth of 15 per cent” said Shahid Hussain Asad, Member (Inland Revenue-Policy), who is also official spokesman of the FBR while talking to The Nation.
Finance Minister Senator Ishaq Dar had pinned high hopes on the tax officers for achieving target in April 2014. However, keeping its previous tradition intact, the FBR once again missed the target . The FBR is struggling to achieve the revenue collection during ongoing financial year despite withholding huge amount of refunds of Rs 97 billion of the taxpayers. The government has revised downward the tax collection target to Rs 2345 billion against the budgetary target of Rs 2475 billion for the FY2014. However, the massive shortfall occur in April might make the revised target difficult to achieve.
Finance Minister Senator Ishaq Dar might now start to sit in FBR instead of finance ministry to monitor the tax collection efforts. Ishaq Dar on April 16 conveyed to the Federal Board of Revenue in clear terms that if tax collection target for April 2014 is not achieved he would be left with no option but to start sitting at the Revenue Division to ensure achievement of revised tax collection target of Rs 2,345 billion by June 30, 2014.
Senator Ishaq Dar was much annoyed with the performance of the FBR during nine months. However, the massive shortfall in April would further infuriate the top economic manager of the country.
The tax department has to collect Rs 602 billion in remaining two months (May and June) of the current financial year to reach the revised target of Rs 2345 billion, which is mammoth task for the tax bosses. The target set for the fourth quarter (April-June 2014) was Rs770b to reach the revised target of Rs2,345b by the end of June 2014. Tax experts believe a shortfall of Rs70 to Rs80 billion in the fourth quarter. The actual tax collection of the FBR is Rs 1646 billion, as it has withhold Rs 97 billion of the tax refunds of the taxpayers, admitted by Chairman FBR Tariq Bajwa before the Senate Standing Committee on Finance and Revenue.
The government would struggle to maintain budget deficit at 5.8 percent of the GDP (Rs 1508 billion) as committed with international monetary fund after facing massive shortfall in tax collection.