October 05, 2007	Friday	Ramazan 22, 1428

ISLAMABAD, Oct 4: With a major shortfall in revenue collection target in the first quarter, the tax authorities are worried that they may not achieve the annual revenue target of Rs1,025 billion.

Tax authorities conceded that revenue collection in the first quarter (July-September 2007) remained short of target to the extent of over Rs16 billion as against the fact that economy witnessed no major shock.

If this is assumed as the base, annual revenue realisation may face a shortfall of more than Rs64 billion. The shortfall may turn out to be even higher in view of ensuing elections during which tax machinery generally becomes lax.

Even some officials termed the target an ambitious one, and politically-motivated as it would be a huge task to achieve more than 21 per cent growth per month for achieving the annual target.

The economic wizards projected a nominal growth of 14 per cent as base for revenue realisation during the current fiscal year. Even growth in revenue was not satisfactory over last year during the first quarter as it grew at nine per cent.

As shortfall is visible, the Federal Board of Revenue (FBR) would try old tactics to get advance taxes or withholding refunds in a bid to show positive results, the officials said, and added it would again distort the whole chain of revenue collection process.

Analysts said below less than 10 per cent is the poor performance though growth in economic movement is going good.

They said for reducing the shortfall, the tax authorities could only materialise revenue in the range of Rs2-3 billion with the extension in the date for filing of income tax returns.

The date has been extended from Sept 30 to Oct 20 to get extra revenue and to bridge the gap in the shortfall.

No major revenue can be generated under the head of sales tax and federal excise duty till the final figures are issued by the tax authorities in the next couple of weeks.

Official provisional figures obtained from the finance ministry showed that revenue collection during the first quarter remained short by Rs16.6 billion as it stood at Rs201.6 billion in July-September of 2007 as against the target of Rs218.2 billion set for the same period.

However, it recorded a growth of 9.6 per cent during the period under review when compared with last year when collection was Rs183.9 billion.

The FBR normally issues provisional figures on the last day of each month, but this time the board is perhaps waiting for some miracles to achieve the desired results.

Tax-wise collection showed that income tax collection remained short of target by Rs9 billion as it stood at Rs74.9 billion during the July-September as against the target of Rs83.9 billion target.

The sales tax collection during the period under review stood at Rs82 billion as against Rs84 billion target, leaving a shortfall of Rs2 billion. The excise collection remained short of target by Rs5.8 billion as it stood at Rs15.7 billion as against Rs21.5 billion over the same period last year.

The custom duty collection stood at Rs29 billion in July-Sept as against Rs28.8 billion target which has almost been achieved.