ISLAMABAD - The PML-N government is likely to miss the revised tax collection target of Rs 2691 billion set for the outgoing financial year despite introducing five mini-budgets to generate additional revenue to meet the target.

The Nation has learnt during discussions with eminent economists that Federal Board of Revenue could collect maximum Rs 2600 billion by the end of the outgoing fiscal year. They were amazed to know government is setting unrealistic revenue collection target for the upcoming fiscal year, as it is contemplating to fix the target at around Rs 3.2 to Rs 3.3 trillion.

The government had already revised the annual revenue collection target to Rs 2691 billion from budgetary target of Rs 2810 billion due to the continuous failure of the tax department to meet its targets. The government even imposed new taxes and duties to generate additional revenue for achieving the revised target. But still, the tax department is struggling to achieve its target.  

“I do not think that FBR will reach the revised target of Rs 2691 billion, as it will hardly collect Rs 2600 billion by the end of June 2015”, said former Finance Minister and renowned economist Dr Hafiz Pasha while talking to The Nation. He further said that government set unrealistic targets on the direction of the International Monetary Fund (IMF).

Dr Pasha was of the view that revenue collection target of Rs 3.2 to Rs 3.3 trillion for the next fiscal year seems unrealistic.

Adopting almost same stance, Dr Ashfaque Hasan Khan, an economist and member of government-constituted Economic Advisory Council (EAC) estimated that FBR would able to collect only Rs 2550-2575 billion during current year.  

The FBR had accumulated Rs 1975 billion during first ten months (July to April) of the current fiscal year 2014-15. The FBR has to collect Rs 716 billion during remaining two months (May and June) of the year to reach the revised target of Rs 2691 billion.

The government had introduced five mini budgets within few months to generate additional revenue, as in the last development the Economic Coordination Committee (ECC) of the Cabinet on April 30 increased the GST on high speed diesel (HSD) from 32pc to 34pc. Sales tax on petrol, kerosene, light diesel oil (LDO) and high-octane blended component (HOBC) increased from 18pc to 20pc.

Prior to the aforesaid decision, the government also introduced additional revenue measures include: (i) raising the GST rate on petroleum products (excluding furnace oil) from 17 to 27 percent in two stages; (ii) levying regulatory duties on steel products and scrap metal; (iii) introducing a regulatory duty on mobile phones; (iv) levying an additional 5 percent regulatory duty on furnace oil; (v) increasing the withholding tax on non-filer contractors, service providers, and importers; and (vi) increasing import duty on luxury items; and (vii) levying regulatory duty on metal scrap.