ISLAMABAD
The government is likely to take additional taxation measures worth above Rs 200 billion in the upcoming budget for the next financial year 2015-16 in order to reach mammoth revenue collection target of Rs 3100 billion.
The government has set revenue collection target at Rs 3100 billion for the upcoming fiscal year, which would be 19 percent higher than expected collection of Rs 2605 billion of the outgoing financial year 2014-15. Additional revenue, over and above the current fiscal target of Rs2605 billion, would have to be met through other measures and the withdrawal of tax exemptions.
The government would withdraw tax exemptions worth of Rs 103 billion in the budget 2015-16, as it did in the previous budget. Similarly, the government would impose new taxes worth of Rs 100 billion in the upcoming budget. The government has estimated to raise Rs 300 billion for the next financial year due to the inflation and economic growth (combined 11.5 percent). The finance ministry has projected growth in the rate of inflation at 6 percent in the FY2015-16 and expects the economy to grow by 5.5 percent.
Chairman Federal Board of Revenue Tariq Bajwa on Wednesday informed the National Assembly’s Standing Committee on Finance and Revenue that government would impose taxes on those areas where currently there is no tax. The tax rate for the non-compliant persons would likely to increase and might decrease in some cases for the complaint persons, he added. It is worth mentioning here that government had fixed the tax collection target at Rs 2810 billion for the outgoing financial year with revenue generating measures worth of Rs 231 billion in the last budget. However, the target was revised twice, first to Rs 2691 billion and then to Rs 2605 billion.
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.
Chairman FBR blamed the declining oil prices, sluggish growth in industrial sector and imports for the lower revenue collection made during outgoing year. Similarly, the country’s GDP growth and inflation remained lesser than the projection, which affected the revenue collection, he added. The country’s GDP remained at 4.2 percent against the target of 5.1 percent and inflation at 4.8 percent as compared to the target of 8 percent.
Meanwhile, tax to GDP ratio would increase to 12.2 percent in the upcoming fiscal year from 11.5 percent of the outgoing year. The government has planned to enhance the tax to GDP ratio to 13 percent by the end of the year 2017-18.