ISLAMABAD: The federal government has scaled down direct tax revenue collection target by Rs180 billion for the outgoing fiscal year of 2016-17.
The target was brought down due to refund payment on advance taxes which were taken by the Federal Board of Revenue (FBR) during the previous fiscal year.
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The finance ministry has already revised downward the revenue collection target for the current fiscal year by Rs100 billion to Rs3,521 billion from an actual target of Rs3,621 billion.
Revenue collection target for direct taxes was cut to Rs1,378.84 billion for FY17 from the actual target of Rs1,558 billion, according to a budget document for FY18. The target of income tax collection – the major component of direct taxes – has been reduced to Rs1,363.84 billion from an actual target of Rs1,538.75 billion.
Finance minister and FBR’s senior officials claimed that shortfall in the outgoing fiscal year was due to incentives given under sales tax regime, especially for petroleum, zero-rating and fertilizers; notwithstanding, target for sales tax collection has been increased to Rs1,445 billion as against the actual target of Rs1,437 billion.
However, the collection target of indirect taxes has been revised upward to Rs2,142 billion from Rs2,063 billion for FY17. Improved revenue collection at import stage increased the sales tax collection as well as boosted the customs duty collection.
Therefore, the target for customs duty collection was raised to Rs491 billion from Rs413 billion for the outgoing fiscal year. Due to a drastic decline in revenue from tobacco sector, the federal excise duty collection been revised down to Rs206 billion from Rs213 billion. The government has set Rs4,013 billion as the FBR’s tax revenue collection target for the next fiscal year.
