ACCORDING to media report, there is going to be a shortfall of Rs200bn in the Federal Board of Revenue’s tax collection target for 2016-17. The original target was set at Rs3.6trn which was revised downwards to Rs3.5trn and has further been revised to Rs3.4trn.

This shortfall does not include the held-up refunds of the business community running into billions of rupees and the mounting power sector circular debt which is nearing Rs0.5 trn. The target each year is set at an artificially high level and then revised downwards. Flimsy reasons are given every time for not meeting the target.

The bottom line is that the PML-N government wants to protect the vested interest of the powerful groups comprising the rich and the elite class. The brunt of the burden continues to be borne by the common man in the form of indirect taxes and withholding taxes. Big farmers remain outside the ambit of taxation while the wealthy classes are offered concessions, reliefs and amnesty schemes at the expense of the masses.

The moot point is that the PML-N government has miserably failed in lifting the economy. Owing to limited tax base, the current and development expenditures are being financed through reckless borrowing. Currently, 45pc of the budget goes into debt-servicing and this factor is going to aggravate. A financial bankruptcy is not far-off.

A. Majeed

Karachi

Published in Dawn, June 26th, 2017