ISLAMABAD: Federal Board of Revenue (FBR) Chairman Nisar Muhammad Khan has vowed to recover the shortfall occurred in the first quarter of financial year 2016-17 in second quarter.
“The FBR collected Rs 625 billion in July-September (2016-17) against the collection of Rs 590 billion in same period of previous year, showing an increase of around 6 per cent while target set for the first quarter was a growth of 18.2 per cent”, the FBR chairman told the Senate Standing Committee on Finance, Revenue and Statistics here.
Nisar Muhammad said that the FBR has to collect Rs 3,621 billion by the end of current fiscal year which was extremely hard to achieve. He, however, hoped that after taking new interventions of FBR in income tax, it was expected that more revenue would be collected and the target would be achieved.
Khan said the shortfall of Rs 1.6 billion in the first quarter of current fiscal year occurred due to low Sales Tax on petroleum products as compared to the previous year, zero rating of textile sector, lowering of the sales tax on fertilizer sector from 17 per cent to 5 per cent in the last budget, decrease in the country’s imports and low inflation rate.
The chairman said that FBR might like to see increased sales tax rate on petroleum (POL) products as its revenue collection declined because of one-fourth reduction in tax collection on petrol and diesel. “If we used to collect Rs 100 through POL products in last fiscal year, it had now reduced to Rs 75 in the current fiscal year with decreased sales tax rate and volume of POL products and other imported items,” he highlighted.
Nisar said that new taxation on property sector would be streamlined in the coming months which would also help further boosting the revenue collection. He also informed the committee that there was no proposal on the table to impose new taxes in the country.
Chairman of the committee, Senator Saleem H Mandviwala said that the shortfall occurred due to the fact that the FBR had collected advance taxes from a number of companies in a bid to meet the revenue target of the year 2015-16, which resulted in lowering of taxes in the upcoming quarter.
Mandviwala said that the tax target of Rs 3,621billion was unrealistic so the FBR should raise its voice against it because it had to face the music by the end of the day.
He said the tax collection targets are met only through squeezing the existing tax payers and all governments are not giving realistic revenue collection figures. “This is a bad tradition by all governments including ours and it has resulted in an altogether false statement. Even the budget deficit figures are incorrect,” Mandviwala said.
Speaking on the agenda of budgetary allocation and its utilisation in respect of Inland Revenue, Revenue Division, FBR and Customs, Saleem Mandviwala said that the monetisation policy of vehicles for the government officers of BPS 20 and above had failed as there was no financial impact on the budget. He said the budget even increased as the officers get full amount in respect of fuel and maintenance allowance while they were also using the government vehicles. He proposed to review this policy.
The meeting was also attended by Senators Ayesha Raza Farooq, Nasreen Jalil, Kamil Ali Agha, Mushahidullah Khan, Saud Majeed and Osman Saifullah Khan.
