ISLAMABAD - The government has decided to revise the tax collection target by Rs100 to Rs150 billion for the current fiscal year.

The decision to revise the Rs3621 billion tax collection target for the ongoing financial year has been taken after what the government describes as a “massive shortfall” in collection.

The Federal Board of Revenue (FBR) had collected Rs2,265 billion during nine months (July-March) of the ongoing financial year as against the target of Rs2,433 billion for the said period, reflecting a shortfall of Rs168 billion. The FBR would have to collect Rs1,356 billion in just three months (April to June) of the year 2016-17 to meet the yearly target of Rs3,621 billion.

“The government has admitted before the IMF in recent talks that tax collection target could not be achieved due to the government’s pro-growth policies,” said an official of the FBR. He further said that the government had revised the budget deficit target to 4.1 percent of the GDP from 3.8 percent of the GDP due to shortfall in taxes. Therefore, he said, the government would revise the target by Rs100 to Rs150 billion for the current fiscal year.

Finance Minister Ishaq Dar had said that shortfall that FBR experienced in the first eight months was due to the pro-growth incentives offered to various sectors of the economy, particularly exports and agriculture. He said that full impact of the POL prices was not passed to the common man and this caused revenue gap amounting to Rs100 billion.

Meanwhile, the government would appoint new chairman of FBR in next few days, as the incumbent chief Dr Irshad of the tax department, would retire in April. This would be the second appointment of the chairman of the FBR in three months, as Dr Muhammad Irshad was appointed chairman in January this year after retirement of FBR Chairman Nisar Muhammad.

The change in top office of FBR is also hampering government’s efforts to achieve the annual tax collection target, say officials in the FBR.