ISLAMABAD, Jan 2: The Federal Board of Revenue (FBR) is likely to revise downward annual revenue collection target to less than a trillion in the wake of expected revenue shortfall of around Rs60 billion by the end of June 2008, Dawn has learnt.

Provisional figures released here on Wednesday showed that the tax machinery witnessed around Rs36 billion shortfall in revenue as it stood at Rs429 billion during the first half year of the current fiscal year as against the target of Rs465 billion set for the same period.

The shortfall may turn out to be even higher in view of ensuing general elections, which is delayed even by more than a month during which tax machinery generally becomes ineffective due to one reason or the other.

A senior tax official on condition of anonymity told Dawn that formally it has not been decided to revise downward the revenue collection target. However, he said even the chairman of the FBR had admitted that the revenue collection target is not likely to be achieved.

The FBR had already missed the first quarter tax revenue target of Rs218 billion by a wide margin of Rs13 billion. This revision carried a message for the finance ministry that it has set an over-ambitious target for the fiscal year 2007-08.

As the recorded shortfall has been passed on to the third or fourth quarter, it will be a challenge for tax authorities to hit the original target or keep it unchanged. However, the ground realities are not so favourable.

The tax official said many factors are responsible for this lower collection mostly the disturbances occurred one after another during the first half year of the current fiscal year.

Already the law and order situation is hampering normal domestic and foreign trading, impacting revenue generation, he said.

According to an estimate, a single day strike deprives the national exchequer of revenues of around Rs3 billion.

Many factors could be attributed to the low growth in tax revenue, but the major ones among all those are the narrow tax base, loopholes in tax system and suspension of an effective audit.

Official figures showed that the provisional collections were up by Rs20bn during the first half year of the current fiscal year as compared to Rs410bn collected during the same period last year.

The official said the shortfall recorded in the first half year of the current fiscal year was owing to recent tragic development on political front due to assassination of former Prime Minister Benazir Bhutto and Eid holidays.