ISLAMABAD, Dec 24: The government is considering to revise downward third time the annual tax collection target from Rs430 billion for the current fiscal, a senior official in the finance ministry told Dawn on Monday.

Central Board of Revenue (CBR) has demanded of the federal government to reduce the target by around Rs12 billion from the twice revised annual target of Rs430 billion. It said the release of refund/rebate in December and January 2002 has made the twice revised target more difficult.

To this effect, a meeting was held in the ministry of finance on Monday, which was attended among others by secretary general finance, Moin Afzal and the chairman, CBR.

The government has agreed with International Monetary Fund (IMF) to raise the tax-to-GDP ratio from last year 11.3 per cent to 11.5 per cent during the current financial year, which requires the CBR to collect Rs430 billion in the current fiscal.

According to the source, economic wizard has declined the further revision in the tax collection on the ground that it would not be possible for the government to meet the expenditures in case of less revenue collection.

Under the head of direct taxes, the tax authorities have collected Rs42.14 billion during the first five months of current fiscal against the target of Rs45.7 billion, a decline of 7.78 per cent or Rs3.56 billion.

The finance ministry has objected to the CBR plea of lowering of tax as unjustified.

The government had earlier revised downward the tax collection target from the budgetary target of Rs457.7 billion to Rs443.7 billion a decrease of 3.1 per cent or Rs 14 billion. Following the September 11 incident, the government further revised the tax collection target from Rs443.7 billion to Rs430 billion, down by 3.18 per cent or Rs13.7 billion.

Analysis of revenue collection since Sept 11 showed that CBR has lost around Rs4.04 billion revenue collection in September, Rs3.33 billion in October and Rs6.14 billion in November.

The tax authorities are expecting another shortfall of around Rs7 billion in the current month, the source added.

Tax analysts said that if the government further revised the tax collection target from Rs430 billion, then it would not be possible to generate the additional amount of Rs140 billion in the next three years as agreed with the Fund under Poverty Reduction and Growth Facility (PRGF).