ISLAMABAD: The provisional revenue collection of Federal Board of Revenue (FBR) has fetched Rs960 billion against quarterly envisaged target of Rs1,071 billion, witnessing a substantial revenue shortfall of Rs111 billion so far.
The FBR has received over 0.4 million income tax returns till September 30, 2019 against 0.350 million returns in the same period of last financial year.
FBR chairman Shabbar Zaidi, in a statement said that “tax collection up to 90 percent of highly aggressive target for quarter ended September 30, 2019 has been achieved. Collection is Rs960 billion. Some more positive adjustment is expected. Furthermore this amount excludes refunds of past years of 15 billion.”
Now IMF’s technical team is expected to visit FBR in third week of October 2019 probably after the annual meeting of IMF/World Bank that is scheduled to be held in Washington DC this year, in order to ascertain the capability of tax machinery to undertake structural reforms and achieving the desired annual target of Rs5,503 billion for the current fiscal year.
Revenue shortfall ranging around Rs120 billion in first quarter will set the stage of revenue mobilisation efforts, as the target of second, third and fourth quarters will be more challenging for the FBR.
In first three months (July-Sept) period of the current fiscal year, the FBR has collected Rs960 billion against Rs836 billion in the same period of the last fiscal year, registering a growth of 13.6 percent.
The FBR has mainly blamed the import compression responsible for this revenue shortfall, arguing that the impact of negative growth in Customs Duty and Income Tax caused net revenue loss to the tune of Rs100 billion to Rs150 billion.
Earlier, during the day Shahbar Zaidi told a couple of reporters at Board’s headquarters that the revenue collection would be hovering around Rs950 billion to Rs970 billion till finalisation of revenue collection figures. When asked about total received income tax returns, he said that it were more than last year till this period.
The government has agreed with the IMF that the quarterly (July-Sept) period target of FBR will be standing at Rs1,071 billion. The FBR had collected Rs580 billion in first two months July and August 2019.
“Insha’Allah, we will cross Rs950 billion mark for end September,” said senior official of FBR and added that the possible revenue shortfall might be standing at Rs100 to Rs120 billion.
So far the FBR collected Rs370 billion in outgoing month (September 2019) and total collection went up to Rs950 billion. One top official of the FBR told The News in background discussions that the net impact of import compression caused net revenue loss to the tune of Rs100 to Rs150 billion. “We have already informed the government about the reasons that played negatively to slash our revenue collection,” he said. The Customs Duty and Income Tax at import stage witnessed negative growth, however, the General Sales Tax (GST) at import stage achieved slight positive growth owing to government’s decision to charge GST of retail price so this administrative step helped the FBR to collect more tax through GST on import stage.
The revenue collection of Inland Revenues on account of Income tax, GST on domestic front and Federal Excise Duty (FED) achieved 30 percent growth but the negative growth on import stage played havoc with the FBR for achieving the desired collection.
If the FBR collects Rs950 to Rs955 billion, the overall growth will touch close to 13.8 percent compared to the collection of Rs836 billion in the same period of the last financial year.