ISLAMABAD: The Federal Board of Revenue is facing a shortfall of more than Rs26 billion in the month of February 2013 and fears that the tax machinery may not be able to achieve the downward revised revenue target.
This shortfall is expected to jack up budget deficit to an un-manageable level.
In absolute terms, the revenue collection has reached Rs140 billion in February 2013 as against the projected target of Rs166 billion set for the same month.
The overall revenue collection witnessed a paltry growth of 5.2 percent in February this year over the same month of last year collection of Rs133 billion.
To adjust the shortfalls recorded in revenue collection in the past eight months, FBR had revised the revenue collection two times.
For the current fiscal year, FBR revised the budgetary revenue target to Rs2,231 billion from Rs2,381 billion, showing a shortfall of Rs150 billion. Similarly, after further dips in revenue collection, the revenue target was further lowered to Rs2,190 billion from the target of Rs2,231 billion, reflecting a further decline of Rs41 billion.
A source in the FBR told Dawn that finance ministry was opposing the downward revision of revenue target. “We are trying to convince the finance ministry about the second revision in tax collection target,” the source added.
The finance ministry has already informed FBR that the low collection will edge up the budget deficit.
All federal taxes are way behind from their respective targets for the current fiscal year excluding collection from customs duties and the refunds of the taxpayers were also withheld to show positive results, the source added.
With this shortfall, the FBR is unlikely to achieve the revised collection target of Rs2,190 trillion set for 2012-13. FBR now estimates that the collection will hardly reach Rs2 trillion by end June 2012.
Last year too revenue collection remained short of original target of Rs1,952 billion, by around Rs70 billion.
In July-Feb period, FBR has collected Rs1,167 billion leaving a huge amount of Rs1023 billion to be collected in the next four months (March-June).
FBR spokesperson and senior member Inland Revenue Service Israr Rauf told Dawn that the board will achieve the revised target with the help of additional revenue measures.
He said that various notifications were issued in the past few days for introduction of new taxes which will yield additional Rs52 billion to 60 billion in revenue collection in the next four months.Rauf said that the annual impact of these additional taxation measures will be in the range of Rs200 billion. The new taxations included revision of withhold tax rates on imports, revision of rate on local supply of five sectors, minimum tax for big stores, and single rate of cigarettes.
The spokesperson claimed that in the month of March, FBR will collect around Rs200 billion. He said in March advance tax collection will improve overall revenue collection of the country.
However, the customs revenue collection has shown a declining trend which will have a negative impact on the overall collection in the months ahead.