ISLAMABAD

The Federal Board of Revenue (FBR) on Monday revealed that government had faced a revenue loss of Rs 70 billion due to the declining oil prices in the country that benefited the masses.

Finance Minister Senator Ishaq Dar has chaired the meeting on the consecutive second day to devise a strategy for revenue collection in second half (January to June) of fiscal year 2014-15. The government is struggling to achieve the annual tax collection target due to decreasing oil prices in the country, as petroleum products prices are major source of tax collection.

The government reduced the prices of petroleum products by more than Rs 20 per liter in last couple of months. Meanwhile, government would further reduce oil prices for next month of January.

Continuous decreasing oil prices have made the yearly revenue collection target difficult to achieve. Sources informed that economic managers of the country are contemplating alternative plans to offset the drop in collections. A top level finance ministry official informed The Nation that government is likely to impose up to five percent Regulatory Duty on import of oil for additional revenue generation.

The FBR had collected Rs 900 billion in first five months (July to November) of the ongoing fiscal year. Meanwhile, the tax department has to collect Rs 1910 in remaining seven months (December to June), which seems difficult to achieve without additional revenue measures. Therefore, the government is likely to impose RD on oil products.

According to the press statement issued here, Chairman FBR presented a detailed report as directed by the Finance Minister in the meeting held on Sunday evening regarding the benefit passed on to the general public on the petroleum products.

Chairman FBR in his briefing told the Minister that the government had incurred a revenue loss of Rs70 billion by this exercise.

FBR has been preparing a summary to be presented to the Prime Minister on the start of the new year stating what further benefit could be passed on to the consumers while creating a little fiscal space for the federal government to carry on with its funding for other PSDP programmes.

The Finance Minister said “It does not mean that we will over charge the consumers; the benefit of the people of this country will still be our first priority but along with the consumers we are only trying to partially recoup the losses of revenue so far incurred. We hope that we will not disappoint the people and will also be successful in finding a little fiscal comfort for the federal Government and this finance will also be used in the best possible interest of the public”.