ISLAMABAD - The Federal Board of Revenue (FBR) is likely to miss the revised tax collection target for outgoing fiscal year (2017-18) by around Rs100 billion, it has been learnt.
The FBR will have to collect Rs661 billion during ongoing month of June to achieve its revised tax collection target of Rs3935 billion. The FBR collected Rs3.274 trillion during eleven months (July to May) of the ongoing fiscal year as against Rs2.854 trillion during the same period of the previous fiscal year, registering 14.4 percent growth in collection.
However, background discussions with the officials of ministry of finance and FBR revealed that government may miss the revised target by huge margin. The federal government had already revised the tax collection target of FBR to Rs3935 billion for the outgoing fiscal year from the Rs4013 billion.
Sources said that annual tax collection target was optimistic, which was difficult to achieve. Similarly, the previous PML-N government had announced various tax incentives for different sectors, which is also one of reasons of missing the tax collection target. They further informed that FBR had issued more refunds to the exporters during outgoing fiscal year. The total amount of refunds issued during the year was more than Rs100 billion in first 11 months as against Rs54 billion issued during the entire 12 months of the previous year.
The massive increase in tax collection shortfall would widen the budget deficit during current fiscal year. Pakistan’s budget deficit could surge to above 6.5 percent of the GDP during outgoing fiscal year (2017-18) mainly due to expected massive revenue shortfall and provincial governments’ inability to give surplus budgets. The government had revised the budget deficit target to 5.5 percent of the GDP. Earlier, the government had set budget deficit target at Rs1.48 trillion (4.1 percent of the GDP) for the ongoing financial year 2017-18. However, it is projected that budget deficit could go beyond 6.5 percent of the GDP (above Rs2.237 trillion) by the end of June this year.
Finance Minister Dr Shamshad Akhtar recently revealed that government would miss the budget deficit target of 4.1 percent of the GDP (Rs1.48 trillion) for FY2018. The deficit is likely to increase to 6.1 percent of the GDP (Rs2.2 trillion) mainly due to expected shortfall in revenues.