ISLAMABAD: The federal government has decided to decrease the revenue collection target of Rs3,621 billion set for the ongoing fiscal year by Rs100 to Rs150 billion after a massive shortfall.
The Federal Board of Revenue (FBR) has collected Rs2,265 billion during nine months (July-March) of the current financial year as against the target of Rs2,433 billion for the corresponding period, showing a shortfall of Rs168 billion. The FBR will have to collect Rs1,356 billion in the remaining period of three months (April to June) to meet the set target of Rs3,621 billion.
According to official sources, the government has told the IMF in recent talks that tax collection target could not be achieved due to its pro-growth policies. The government had revised the budget deficit target to 4.1 percent of the GDP from 3.8 percent of the GDP due to shortfall in taxes, they said.
Federal Finance Minister Ishaq Dar has also admitted that FBR experienced a massive shortfall in the first eight months due to the pro-growth incentives offered to various sectors of the economy, particularly exports and agriculture. He said that full impact of the POL prices was not passed to the common man and this caused revenue gap amounting to Rs100 billion.
The government is also facing R70 billion revenue loss in current fiscal year due to the exemptions awarded to China-Pakistan Economic Corridor (CPEC) projects as well as under exports package. The FBR has estimated the cost of tax exemption at around Rs30 billion due to incentives given under the exports package.
