ISLAMABAD: Despite introduction of two supplementary finance bills, the revenue collection for the first seven months of the fiscal year showed a shortfall of more than Rs197 billion, with a meagre 3pc growth in the July- January period.

Provisional figures collected by the FBR and seen by Dawn show that revenues for the period reached Rs2,059 billion against a target of Rs2,256bn.

In comparison to last years collection of Rs1,996bn the revenue collection posted a growth of 3pc to Rs2,059bn.

On monthly basis, the revenue collection has reached to Rs280bn in January 2019 as against the projected target of Rs307bn, posting a shortfall of Rs27bn and growth of 2.2pc as against Rs274bn collected in the same month last year.

An FBR source with access to the data told Dawn that the revenue collection data is still coming in and will be adjusted in the next week. However, the source said the collection is far behind the projected targets.

January has emerged the second worst month after December in terms of revenue collection when FBR has received lower tax collection. In December FBR posted Rs75bn shortfall in revenue collection.

The major contributor in the shortfall is Inland Revenue Services (IRS) while custom collections almost remain on target because of currency devaluation. The sluggish growth was seen in revenue despite low refund payments.

The widening revenue shortfall means the government will have to take drastic measures going forward. The State Bank has already called for greater focus on “fiscal consolidation” and raised the policy discount rate largely on account of poor fiscal performance. The sources said the IMF authorities had estimated additional revenue requirement of about Rs300bn during the current year to make up for the revenue loss in first half of the year.

It appeared that the IMF estimates about additional revenue measures are more realistic to achieve compared to the revenue targets set in the first supplementary budget announced in September and keep fiscal deficit within budgetary limits.

Published in Dawn, February 1st, 2019