ISLAMABAD: The Federal Board of Revenue (FBR) has missed revenue collection target by a whopping margin of Rs50 billion for August, second month of the new fiscal year, despite introducing several revenue and administrative measures in the last budget.
This shortfall is in addition to the one recorded in the first month (Rs14bn in July) of the current fiscal year, taking the total shortfall in revenue collection to Rs64bn in just two months of the current fiscal year.
As against the target of Rs352bn projected for the month of August 2019, the FBR has managed to collect provisionally Rs302bn, which is much below the government expectation in view of their claim to make record collection.
Prime Minister Imran Khan removed the then FBR chairman in May as it became clear to him that the revenue collection was heading towards a record shortfall. To achieve the ambitious revenue target of Rs5.55 trillion, Mr Khan on May 10 appointed Shabbar Zaidi from the private sector as FBR chairman to reverse the downward trends in revenue collection.
Total shortfall reaches Rs64bn in two months of current financial year
The customs collection has fallen short of target by Rs13bn, as the collection amounted to Rs52bn in August against the target of Rs65bn. In the first month (July) of this fiscal year, the customs shortfall was recorded at Rs9bn.
When compared with last year’s figures, the collections in customs fell by 1.88pc as it was Rs53bn in the last year.
Inland Revenue Tax — income tax, sales tax and federal excise duty (FED) — collection reached Rs250bn against the target of Rs287bn, indicating a decline of Rs37bn or 12.58pc short of the target.
While income tax collection rose to Rs92bn, it was still Rs18bn or 16.36pc short of Rs110bn target projected for the month. Sales tax collection reached Rs141bn as against the target of Rs158bn projected for the same month, indicating a decline of Rs17bn or 10.75pc short of target.
Similarly, the FED collections clocked in at Rs17bn as against the target of Rs19bn, showing a decline of Rs2bn or 10.5pc short of target.
However, some improvement has been seen in the month of August this year in Inland Revenue Tax collection as compared to last year’s collection. It posted a growth of 26pc with Rs250bn revenue collection in August against Rs198bn over the corresponding month of last year.
Further analysis shows that the domestic Inland Revenue Tax, which was Rs110bn in August 2018, increased to Rs152bn in August 2019, showing an increase of 39pc. This growth is mainly achieved by a 39pc increase in income tax collection, 43pc in sales tax and 46pc in FED. Contrary to this, the collection of Inland Revenue Tax through import was recorded at Rs98bn in August as against Rs88bn in the second month of last fiscal year, indicating a growth of 11pc. This was mainly achieved by 17pc growth in sales tax, as income tax at import stage posted a negative growth of 16pc.