FBR tax collection target may decrease by Rs84 billion
ISLAMABAD: The Federal Board of Revenue (FBR) at their best will be able to collect Rs3.85 trillion in taxes, the reason for the decline in collection figures are due to depreciation of rupee, prices of petroleum related products and various revenue generating escapes.
The normal income accumulation of Rs3.85 trillion will be Rs162 billion lower than the first target and Rs84 billion not as much as the overhauled focus on that the PML-N government set barely a month back.
According to FBR’s official, it is informed to new caretaker Finance Minister Dr Shamshad Akhtar that revenue collection will show declined trend due to shortfall of the revised target of Rs 3.935 trillion.
Akhtar chaired a meeting to review performance of the FBR in the current fiscal year 2017-18.
Rs 4.013-trillion tax collection target for the outgoing fiscal year was already approved by the parliament. But last month, government had to reduce the target by Rs 78 billion to Rs 3.935 trillion due to continuation in the declining trend.
The projected collection of Rs3.85 trillion are comparatively higher, around Rs490 billion or 14.5% than the receipts of previous fiscal year.
For enhancement in revenue assortment, FBR took supplementary decisions by addition of Rs 150 billion which comprises of imposition of regulatory duty Also, the positive effect of 10% deterioration of the rupee on impose accumulation was a base Rs 55 billion, as per FBR authorities.
In addition to that, the nominal gross domestic product (GDP) growth of about 10% (inflation plus real GDP growth) should have yielded an additional Rs 336 billion in taxes.
The joint impact of these elements ought to have been Rs 540 billion, which recommends income spillages. The higher assessment on the offer of oil based goods because of increment in their costs was notwithstanding the above elements.
The FBR told the finance minister, on the last day of May, there will be hit in the revenue if Rs 33 billion in sales tax refund is released.
However, these refunds had been blocked in the past to inflate revenues.
The FBR’s internal assessment revealed that even after paying Rs33 billion in refunds, it still owes refunds of Rs300 billion. It has also taken Rs150 billion in advance income tax to meet its quarterly targets, said the officials.
From July through May of the current fiscal year, the FBR has recorded provisional net revenue collection of Rs3.274 trillion.
FBR chairman is being pressurized by the finance minister to do all possible efforts in order to accomplish the revenue target set this year. Which is only possible if there is improvisation of tax-to-GDP ratio, resulting in funding development projects.
The FBR chairman revealed that the tax-to-GDP ratio had increased from 8.7% in 2012-13 to 12.4% in 2017-18. However, the number of tax return filers has almost doubled to 1.4 million in 2017-18 and Statutory Regulatory Orders (SROs) worth Rs300 billion have been withdrawn to broaden the tax net.
For the facilitation of taxpayers, their CNICs had been made the National Tax Number and tax slabs had been reduced to four from seven.
The decline in revenue collection is mainly an impact of different amnesty schemes and tax rebates offered by the previous government.
The FBR informed the minister that they had to accept the decision of the previous government unwillingly for lowering the tax on individuals to only 15%, keeping in mind the gap between income tax rates for the association of persons, which is currently 25%, and individual taxpayers may persuade people to revoke business partnerships.
The minister focused on the advancement in the tax system through the use of technology.