ISLAMABAD - The Federal Board of Revenue (FBR) would have to collect Rs20.5 billion everyday in last ten days (21 June to 30 June) of the outgoing financial year in order to reach twice revised tax collection target of Rs2.6 trillion.
The FBR has to collect Rs205 billion in remaining ten days of the year 2014-15 to meet the annual revenue collection target, which is a challenging task for the government.
“We have collected taxes worth of Rs2.4 trillion during July-June 20 2015 as against Rs 2.1 trillion of the corresponding period of previous year”, said Shahid Hussain Asad, Member (Inland Revenue) Policy, who is also spokesperson to the FBR, while talking to The Nation. He was optimistic that tax department would meet the revised target by the end of June 2015.
The FBR had fixed the target of Rs2810 billion but it was revised down twice by the government, bringing it down to Rs2691 billion and then finally to Rs2605 billion for the year 2014-15. The government reduced the budget target by Rs205 billion mainly because of slower than targeted economic growth rate, lower inflation and decline in international oil prices during outgoing year.
The government had suffered a revenue loss of Rs 68 billion due to the decline in oil prices in international level. Similarly, the GDP growth remained at 4.2 percent against the target of 5.2 percent and inflation at 5 percent against the target of 8 percent.
However, the government had introduced five mini budgets within few months to generate additional revenue and to reach the target of Rs2.6 trillion. The additional revenue measures include raising GST rate on petroleum products from 17 to 27 percent; levying regulatory duties on steel products and scrap metal; introducing a regulatory duty on mobile phones; levying an additional 5 percent regulatory duty on furnace oil; increasing the withholding tax on non-filer contractors, service providers, and importers; enhancing import duty on luxury items; and levying regulatory duty on metal scrap.
However, following its previous traditions, the Federal Board of Revenue (FBR) would once again miss the revised tax collection target of Rs2.6 trillion set for the outgoing financial year by some Rs25-30 billion despite imposing new taxes worth of billion rupees.
“The revenue collection is going to face a shortfall in the range of Rs25 to Rs40 billion in outgoing fiscal year”, said an official of the FBR wishing not to be named. He was of the view that collection of more than Rs 200 billion in just ten days is a big challenge for the concerned authorities.
He further said that FBR could collect Rs 2580 billion maximum as against the target of Rs 2605 billion. It is worth mentioning here that government had fixed the next year’s target of Rs3.1 trillion on the basis of Rs2.6 trillion.
Eminent economists like Dr Hafiz Pasha and Dr Ashfaque Hasan Khan already projected that FBR could not cross the figure of Rs2.6 trillion during outgoing fiscal year. “The FBR would able to collect only Rs 2550-2575 billion during current year”, Dr Ashfaque Hasan Khan, an economist and member of government-constituted Economic Advisory Council (EAC) told The Nation in May this year.