Revenue shortfall rises to Rs387bn

ISLAMABAD: The Federal Board of Revenue missed collection targets for the first seven months of this fiscal year by Rs387 billion, as against the benchmark of Rs2.792 trillion.

According to provisional figures, the tax body has collected Rs2.41tr during 7MFY20 as against the target of Rs2.79tr, leaving a shortfall of Rs387bn.

However, collection figures show a growth of 16.8 per cent compared to same period last year’s level of Rs2.07tr.

In January, the tax body posted a shortfall of Rs104bn with Rs321bn in revenue collection, versus the target of Rs425bn for the same month last year.

January target missed by Rs104bn

During the first seven months of the current fiscal year, the FBR paid Rs69bn refunds to taxpayers, mostly exporters.

The FBR on Friday also extended the last date for filing of income tax returns/statements for TY19 until February 28. It is available to all individuals (salaried and non-salaried), association of persons and companies.

Until Jan 31, the FBR has received as many as 2.339 million returns while the date has been extended to receive another 500,000. Last year, number of returns filed stood at 1.8m — the highest ever.

The Interna­tional Monetary Fund team is due next week to conduct a review. It has already lowered the annual revenue collection target to Rs5.270tr from the budgetary projection of Rs5.503tr.

The customs gross collection fell short of target by Rs114.9bn (or 23.5pc) to Rs373.2bn in 7MFY20 versus the projected amount of Rs488.1bn. This decline was mainly attributable to falling imports, and contributed by mis-declaration, corruption and under-invoicing.

The income tax gross collection clocked in at Rs895.8bn versus target of Rs1.005tr over same period last year, showing a shortfall of Rs109.5bn or 10.89pc.

This was desp­ite the imposition of several revenue measures by the government in the last budget.

In the first seven months, sales tax collection on goods reached to Rs1.005tr as compared to the projection of Rs1.128tr, thus missing by Rs122.8bn or 10.88pc.

The general sales tax on goods has failed to hit target despite expansion of tax on goods and double-digit inflation.

Meanwhile, the federal excise duty (FED) gross collection reached Rs144.8bn, versus target Rs171.4bn, showing a shortfall of Rs26.6bn or 15.5pc. FED rates were also revised upward on cigarettes and other products in the last budget.

Prime Minister Imran Khan removed the former FBR chairman in May 2019 as it became clear to him that the revenue collection was heading towards a record shortfall.

For achieving the ambitious target of Rs5.55tr, he appointed on May 10 Shabbar Zaidi from the private sector.