ISLAMABAD - The cash-starved government is likely to downward revise the annual tax collection target by Rs 130 billion to Rs 2345 billion for the ongoing financial year 2013-14 after Federal Board of Revenue has faced massive revenue shortfall of Rs 100 billion in eight months.
“The government has no other option than to downward revise the revenue collection target for the current fiscal year, as it cannot impose new taxes to reach the annual target due to the public/political parties pressure”, said a senior official of the FBR wishing not to be named. He informed that FBR’s collection could not exceed than Rs 2345 billion, which is already estimated by the international monetary fund (IMF).
Talking about the imposition of new taxes, he said that government has the easiest way to increase revenues by enhancing the tax rates but it would not do so keeping in view the public/ political parties pressure.
The PML-N government, which had introduced heavy taxation measures worth of over Rs 200 billion in budget 2013-14, is struggling to achieve the target of Rs 2475 billion. According to the FBR’s latest collection figures, the tax department has collected Rs 1363 during eight months (July to February) of the ongoing financial year 2013-14 against the target of Rs 1464 billion, leaving shortfall above Rs 100 billion.
Meanwhile, FBR has to collect Rs 1112 billion in remaining four months (March to June) of the present financial year 2013-14, which means Rs 278 billion to be accumulated each month, a challenging task.
However, the FBR’s Spokesperson Shahid Hussain Asad was optimistic that tax department would achieve its target of Rs 2475 billion set for current fiscal year. He informed that government has extended the date for filing the tax returns under the ‘Prime Minister Tax Incentive scheme’ to April 30, 2014 that would yield positive response.
It is worth mentioning here that government’s revenue collection target was ambitious from the start. The government has set target at Rs 2,475 billion for the current fiscal year 2013-14 based on the assumption that the FBR collection would be Rs 2007 billion in last financial year 2012-13. However the collection in previous year stood at Rs 1,939 billion. Thus the base has eroded by Rs 68 billion from the beginning of fiscal year (2013-14). Therefore, the target was considered as unrealistic and ambitious from start of the fiscal year i.e. June 1 2013.