ISLAMABAD: The Pakistan Institute of Development Economics (PIDE) has described the revenue target of Rs2,810 billion for the fiscal year 2014-15 as too ambitious to be met, saying the projected increase in revenue collection target is likely to be missed due to various factors.
In a report, the PIDE cited that the highest growth in tax collection Pakistan had ever achieved was 22 percent. The report stated that the government did not take into account the transfer of money to the provinces. One problem in setting the ambitious tax collection target was that estimates of transfers under the NFC to provinces were based on tax collection budgeted at the federal level.
Under the 7th NFC award, it was stipulated that Balochistan will receive its provincial share on the basis of the budgetary projections instead of actual collection of the Federal Board of Revenue (FBR).
Shortfall, if any, due to lesser collection by FBR was to be borne by the federal government. As a result of this law, an additional amount of Rs39 billion has been transferred to Balochistan from 2010-11 to 2013-14 on account of shortfall in collection of the FBR with reference to the collection budgeted at the time of framing the budgets.
The problem of actual projection was not confined to revenue, but it was also reflective in other departments of the government. In fiscal year 2013, the PSDP of Rs two billion was allocated to the Cabinet Division, but the division spent as much as Rs21 billion.
The Capital gains tax, corporate tax rate, excise duty on telecom sector and customs duty have been rationalised in the last budget. The flat rate capital gains tax on trading in securities has been replaced with a cascading structure, with those holding the securities for a longer period paying less.
The report said that the budget envisaged various incentives for textile industry but the expected impact of GSP Plus on the industry was yet to materialise. The poor state of energy supply must be constraining production, therefore, fresh incentives to textile industry, will partly add to the margins of the existing producers, if energy situation remains more or less unchanged during fiscal year 2015.
KP taxpayers unable to file returns?
PARACHINAR: The Federal Board of Revenue (FBR) should immediately rectify an error in new income tax return where compliant taxpayers...
