ISLAMABAD
At the time when tax collection shortfall has surged to Rs 60 billion, the Federal Board of Revenue (FBR) has fixed a challenging revenue collection target worth of Rs 286 billon for the ongoing month of December 2014.
The FBR has accumulated Rs 900 billion during five months (July-November) of the current fiscal year 2014-15 as against the target of Rs 960 billion leaving shortfall at Rs 60 billion. Meanwhile, the tax department has set revenue collection target at Rs 286 billion for current month, which seems challenging due to the declining oil prices.
Sources in FBR informed that government could not achieve the first half target (July-December) of Rs 1246 billion even it achieves the target of December due to the previous months shortfall. “Apart from others, the main reason behind lesser revenue collection is reduction in oil prices, which are directly linked with various taxes”, said an official of the FBR while talking to The Nation. He added that decreasing petroleum prices would cut the import bill; but the tax collection would considerably reduced. Finance Minister Senator Ishaq Dar on Tuesday in a press conference admitted that there would be a minimum Rs 60 billion shortfall in tax revenues during ongoing financial year due to the significant reduction in oil prices. He said at the moment the government was contemplating on how to overcome the shortfall. The soaring revenue accumulation shortfall might force the government either to cut the development budget or to levy new taxes to maintain the budget deficit. Under the current political scenario, the government could not go to impose taxes and it might to slash the public sector development programme to keep the deficit within target. The government has to restrict the budget at 4.9 percent of the GDP during ongoing financial year 2014-15. The National Assembly set Rs2.81 trillion-revenue collection target for the current fiscal year 2014-15 following desires of the IMF, which is higher than the collection of previous. However, independent economists opposed to set unrealistic target, as they viewed to set the target around Rs 2.6 trillion.
Sources believed that government is likely to miss the tax collection target by Rs 150 to Rs 200 billion. The break-up of Rs 286 billion showed that FBR has set income tax collection target at Rs 143 billion, General Sales Tax collection at Rs 105 billion, Federal Excise Duty collection at Rs 12 billion and Customs Duty collection target at Rs 26 billion for the ongoing month of December.