ISLAMABAD - The government could not achieve its tax collection target during ongoing financial year (FY2015) without taking additional revenue generation measures after facing massive shortfall in first quarter (July to September) and due to impact of devastating floods, it has learnt on Wednesday.
The government is struggling to achieve to its target of Rs 2.81 trillion, which was ambitious from the start of current fiscal year. Meanwhile, the current floods have slow down the economic activities that would affect the revenue collection efforts. The Federal Board of Revenue (FBR) had already faced massive shortfall of Rs 20 billion during first quarter of FY2015, as it collected Rs 549 billion against the target of Rs 569 billion for the period under review.
Meanwhile, the growth of tax collection during so far period of the current year is not according to the required growth of 24 per cent. The tax collection has shown growth of 15 per cent, as it collected Rs 549 billion in July-September of FY 2015 as against the Rs 481 billion of the corresponding period of previous year.
“How the tax collection can show massive growth at the time when the economic activities have slowdown after the floods and prolonged sit-ins”, said a FBR officer while talking to The Nation. He added that government would either to revise its target or to impose new taxes, which is not viable option due to the sit-ins. Therefore, he said government is likely to revise its target. Sources in Finance Ministry informed that government would have to make changes in entire budget if it revises the tax collection target to maintain the fiscal deficit within limit of 4.9 per cent of the GDP. He added that Finance Ministry would make change once the report of the damages of floods finalised. It is worth mentioning here that government had set Rs 2.81 trillion target for the ongoing financial year, which is 24 per cent higher than the tax collection of Rs 2.266 trillion of the previous year. The Federal Board of Revenue (FBR) has fixed Rs 676.9 billion as revenue collection target for the second quarter (October-December) for 2014-15 to meet the annual target of Rs 2,810 billion for the current fiscal year. Meanwhile, the FBR had set Rs 681 billion for the third quarter (January to March) and Rs 883 billion for the fourth quarter (April to June) of the ongoing financial year.