ISLAMABAD: The Federal Board of Revenue is still striving hard for achieving the ambitious revenue target of Rs2,475 billion for 2013-14 and has refuted reports regarding directives to revise revenue target from Rs2,475 billion to Rs2,345 billion for the current fiscal year.
As per details, the tax authorities have been satisfied with the 17 percent increase in revenue collection during July-Feb 2013-14 against the corresponding period of 2012-13.
However, the FBR authorities agree that it is difficult to achieve the target in view of the current pace of collection. But officially the annual target for 2013-14 is still Rs2,475 billion unless a downward revision is officially communicated by the Finance Ministry.
The FBR receipts were estimated as Rs 2,475 billion for the current year, which are based on revised projected receipts of Rs2,050 billion for last fiscal year. The FBR collected Rs1,946 billion in the last fiscal year instead of the target of Rs 2,050 billion.
The target for 2012-13 was fixed on the basis of Rs1,952 billion to be collected by end of June 2012-13 but actually the collection for the year 2012-13 ended up at Rs1,883 billion. Thus, the base was eroded by Rs69 billion right from the beginning of 2012-13. There were a number of other internal factors which further contributed to the shortfall: (i) the FBR had to bear deficit of Rs34 billion due to shifting of sales tax on services from FBR to Punjab Revenue Authority (PRA), which was integral part of FBR target of Rs2,381 billion; (ii) the reduction in rate of sales tax from Rs7 to Rs4 per unit of electricity in cases of steel melters and re-rolling units resulted in the decline of collection of sales tax; and (iii) suspension of section 153A of the Income Tax Ordinance 2001, introduced through Finance Act 2012 which was a major documentation measure having revenue impact of approximately Rs15 billion.
The reduction in rate of FED on sugar from 8 percent to 0.5 percent on quantity cleared locally equal to exported sugar caused lower collection of FED. The reduction in ST rates on some items (e.g. steel and plastic) from 22 percent and 19.5 percent to 16 percent in budget 2012-13 also negative impacted on collections.