ISLAMABAD -The PML-N government is struggling hard to improve the tax collection of the country, as it is likely to miss the revised annual revenue target by huge margin despite imposing heavy taxes in the budget 2013-2014.

The incumbent government, which introduced heavy taxation measures worth of Rs 207b in budget with an aim to reach the unrealistic target of Rs 2475b, is struggling to achieve the revised target. 

The Federal Board of Revenue (FBR) has accumulated Rs 1575 billion during nine months (July-March) of the current fiscal year. The tax collection shortfall is around Rs 105 billion in the aforesaid period. The government had projected Rs 2475 billion-tax collection target for FY2014 in the budget, which it later revised downward to Rs 2345 billion after facing shortfall of over one hundred billion during eight months (July-February). Therefore, the tax department would have to collect to Rs 770 billion during remaining quarter (July- to June) of FY2014 to reach the revised target of Rs 2345 billion by the end of June 2014.

However, the economic experts believed that government would be unable to meet the revised target.

“It seems difficult to achieve the revised target of Rs 2345 billion by the end of June 2013”, said Dr Ashfaque Hassan Khan, an eminent economist. Talking to The Nation, he said that FBR’s collection would hardly reach Rs 2250-2275 billion during ongoing financial year 2013-2014, leaving shortfall at over Rs 200 billion. 

The FBR now has to collect to Rs 770 billion in the remaining quarter (April-June) of the ongoing fiscal year to achieve the revised tax collection target of Rs 2345 billion, which is still mammoth target for the tax department. Sources informed that FBR has formulated a strategy to achieve Rs 770 billion in last quarter of FY2014. The revised revenue collection target for April 2014 is Rs 196.3 billion, May 2014 Rs 219.5 billion and revised revenue collection target for June 2014 is Rs 359.2 billion.

However, Dr Khan was of the view that targets of final quarters of the FY 2014 would be difficult to achieve, as its collection in April was likely to register a growth of 16 percent over the last year, taking the collection to Rs 176.88 billion against the target of Rs 196.3 billion. Collection of May 2014 would record growth of 17 per cent, collection at Rs 203.52 billion and accumulation in June 2014 is likely to register growth of 18 per cent over last year, taking collection to Rs 307.63 billion against the target of Rs 359.2 billion. 

It is worth mentioning here that FBR had termed the revenue collection target of Rs 2,475 billion for the current fiscal year 2013-14 as unrealistic and ambitious from the early start of FY2014, as target has been based on the assumption that the FBR collection would be Rs 2007 billion, whereas the collection stood at Rs 1,939 billion. Thus the base has eroded by Rs 68 billion from the beginning of fiscal year (2013-14).