ISLAMABAD - The government’s annual revenue collection target seems impossible to be achieved keeping in view the current status of tax collection, as shortfall has gone beyond Rs 100 billion during eight months (July-February) of the ongoing financial year 2013-2014.
The Federal Board of Revenue (FBR) collected Rs 1363 billion during eight months (July to February) of the ongoing financial year 2013-2014 against the target of Rs 1464 billion, leaving shortfall above Rs 100 billion. The huge shortfall in revenue collection clearly indicates that tax department would struggle to meet the mammoth annual target of Rs 2475 billion set for the current fiscal year.
“The FBR has provisionally collected Rs 1363 billion in July-February 2013-2014 period as compared to Rs 1162 billion of the corresponding period of previous year, showing growth of 17 per cent in one year”; Shahid Hussain Asad, official spokesperson of the FBR informed The Nation. He added that FBR has accumulated Rs 162 billion in the month of February 2014 as compared to Rs140 billion of the same period last year, registering increase of over 15 per cent.
However, sources informed that FBR has missed the tax collection target in the month of February 2014 by around Rs 19 billion, as the target for the said period was Rs 181 billion. Sources were of the view that FBR is most likely to miss the annual target by around Rs 130 to Rs 140 billion. The International Monetary Fund (IMF) had already made it clear that FBR would miss the target by Rs 130 billion as it would be able to collect around Rs 2345 billion by the end of June 2014.
However, the government has decided not to impose new taxes to meet the revenue collection target, but it has planned to shelve the Prime Minister’s new initiatives scheme that would save Rs 115 billion. The inability of the tax department has hit the Prime Minister’s new initiatives scheme of worth Rs 115, as government would not release funds for the scheme owing to scarcity of the resources.
The government had planned in the budget to utilise Rs 115 billion, the block allocation for Prime Minister’s initiatives including distribution of laptops among the students of public sector universities securing over 60 percent marks. Similarly, the government had planned to introduce yellow cab scheme at federal level. The government also planned to announce many other schemes under Prime Minister’s new scheme, for which it allocated Rs 115 billion. However, the financial constraints of the country have hit the programme mainly the revenue collection shortfall and the government decided not to release funds for this scheme.
Meanwhile, the lesser revenue collection has forced the government to heavily depend on the non-revenue collection, which helped the government to restrict the budget deficit at lower side of 2.2 per cent during first half (July-December) of the present financial year. The non-revenue collection contributes over 30 per cent to the overall collection of the government.
According to the figures of Finance Ministry, the government has successfully restricted the budget deficit at Rs540.13 billion (2.1 per cent of the GDP). The government’s expenditures stood at Rs 2.22 trillion (8.6 per cent of the GDP) against revenue of Rs 1.68 trillion (6.5 percent of the GDP). The break-up of revenue collection of Rs 1.68 trillion revealed that government collected Rs 1172.007 billion as tax revenue and Rs 512.541 billion as non-tax revenue during the period under review.
In non-tax revenue, the government has received Rs 38 billion as Coalition Support Fund (CSF) from Untied Stats, collected Rs 28.87 billion as development surcharge on gas, Rs 36.75 billion as royalty on oil/gas, Rs 5.913 billion as gas infrastructure development cess and Rs 67.636 billion as foreign grants.