ISLAMABAD: In the wake of severe power outages and ongoing political transition on the political horizon of the country in the aftermath of general elections, Pakistan’s tax collection agency has been witnessing a massive revenue shortfall for materializing its envisaged target of Rs 2,381 billion by the end of the current fiscal year.
Except tax collection in shape of Customs Duty where tax collection is all set to exceed its envisaged target of Rs 222 billion for fiscal year 2012-13, all other major taxes including Income Tax, Sales Tax and Federal Excise Duty (FED) are lagging behind in achieving the desired tax collection target in outgoing fiscal year, starting from July 1, 2012 to June 30, 2013. The Federal Board of revenue (FBR) has so far revised downward its tax collection target thrice in the year but still lags far behind to meet the target. The initial target was scaled down from Rs 2381 billion to Rs 2193 billion during the tenure of former chairman Ali Arshad Hakeem.
Again, the tax collection target was slashed down to Rs 2050 billion from Rs 2193 billion and third time the Finance Ministry revised down the target further lower and fixed it at Rs 2018 billion.
“The FBR has so far collected Rs 1629 billion till May 27, 2013 and the FBR will have to strive hard in last month (June) to achieve its three time revised tax collection target in the outgoing financial year,” said a senior official of the FBR. By taking into account performance of tax wise, the FBR’s Customs department has collected Rs 206.737 billion during the current fiscal year from July 1, 2012 to May 27, 2013 against total envisaged target of Rs 222 billion for whole financial year.
“We will surpass our desired target by end June 2013 despite decline in dutiable imports,” FBR’s Member Customs Muhammad Riaz said. He said the dutiable imports had declined but with effective enforcement the Customs collection went up by around 15 percent during the ongoing financial year.
In last financial year, the Customs collection stood at Rs 216 billion in 2011-12 and this year target was fixed at Rs 222 billion. “We are hoping that the tax collection in shape of customs duty will touch Rs 240 billion,” he added. He was of the view that the FBR did not get any advances to show its jacked up collection during the current fiscal year.
Answering another query, he said that vehicle amnesty scheme yielded positive results as it fetched more than Rs 16 billion into national kitty. For effective enforcement on Afghan Transit Trade (ATT), he concluded that the Customs department had established separate Directorate to ensure effective enforcement on ATT related issues.
However, the FBR high-ups say the revenue collection on account of Direct and Indirect Taxes such as Income Tax, Sales Tax and Federal Excise Duty (FED) under the domain of Inland Revenue Service (IRS) is not up to the mark so far as its collection increased went up by less than 5 percent. The FBR collected Rs 1422.559 billion in shape of all domestic taxes so far in the current fiscal year against Rs 1361 billion in the same period of the last financial year, registering a meager growth of only 4.5 percent in the outgoing fiscal year.
On account of Direct Taxes, the FBR’s collection stands at Rs 587.548 billion from July 1, 2012 to May 27, 2013 against a collection of Rs 560.284 billion in the same period of last financial year, indicating a growth of 4.9 percent.
The FBR fetched Rs 733 billion in Sales Tax on both import and domestic fronts so far in the outgoing fiscal year compared to collection of Rs 695 billion in the same period of last financial year.
The tax collection in shape of Federal Excise Duty on import and domestic fronts yielded revenues to the tune of Rs 101 billion from July 1, 2012 to May 27, 2013 against a collection of Rs 105 billion in the same period of last financial year, registering a negative growth of 4 percent.
The incoming government of PML (N) will have no other option but to broaden the narrowed tax base to generate revenues up to the optimal level otherwise no country will lend its taxpayers’ money to run day to day affair of Pakistan.