ISLAMABAD: The Federal Board of Revenue (FBR) reported a shortfall of Rs191 billion against the target projected for the first seven months of this fiscal year.
The provisional data shared with media showed that revenue collection grew by a mere three per cent growth to Rs2,060.757bn as against Rs1,995.277bn in same period of last year. The revenue target projected for these seven months was Rs2,251bn.
“We have requested the Finance Division to revise downward the target of FBR,” said Member Policy Dr Hamid Ateeq Sarwar, who was accompanied by Member IR operations, Seema Shakil.
However, Hamid said that the projection of revenue target is only for the internal consumption of the FBR and normally the government revises the target at the end of every fiscal year.
Tax-wise breakdown shows the income tax collection reached Rs755.07bn during July-Jan versus Rs754.9bn over corresponding period of last year, reflecting an uptick of 0.02pc.
Ms Seema said the decline is mainly due to the drop in collection of withholding taxes from contracts, mobile phone and salaries. She said the revenue from corporate returns also declined because of the 1pc downward revision in tax rates.
She said that major hit in collection came from drastic cuts in the allocation for Public Sector Development Programme. Withdrawal of duty on cash transaction might also have a revenue impact.
According to the member, decline in revenue collection from withholding taxes was compensated from other sources, especially tax on demand creation. She said that 41pc growth was recorded in tax on demand creation which shows the contribution of field formations.
Total sales tax collection reached Rs798.8bn during the period, down 0.97pc, from Rs805.2bn in 7MFY18. This decline was mainly contributed by all in sales tax collection on import stage whereas a paltry growth was reported in the sales tax collection on domestic stage.
Sales tax proceeds also remained behind the projected target during the period under review.
Customs duty jumped 17.9pc to Rs389.45bn in 7MFY19, as against Rs330.2bn over corresponding period last year.
On the other hand, federal excise duty collection reached Rs117.4bn versus Rs104.99bn, showing an increase of 11.8pc.
Hamid said the relief measures taken by government might have some short-term negative impact on collection, but will help increasing the level of trust in the government among commoners and business community.
Published in Dawn, February 5th, 2019