FBR facing massive revenue shortfall

ISLAMABAD: The Federal Board of Revenue (FBR) is facing massive revenue shortfall in first half (July-Dec) period of the current fiscal year thus the PTI government is left with no other option but to take additional revenue measures through mini budget for bridging this yawning tax shortfall, The News has learnt.In this new year 2019, the government plans to slap more taxes to bridge its gap on revenue front and possible avenues for jacking up tax rates included cigarettes, enhanced tax rates on imported vehicles, finding ways to collect withholding tax from mobile subscribers including the possibility on the name of dam fund, contemplating upon option to increase rate of additional custom duty by 1 percent, partial withdrawal of incentives of income tax for salaried class and many others. However, the government claims that it will reduce duty on raw materials in order to boost up exports through this mini budget likely to be unveiled around January 15, 2019 before the Parliament.Till filing of this report, the provisional tax collection of the FBR fetched Rs1,775 billion for first six months (July-Dec) period of the current fiscal year against the envisaged target of Rs1,948.7 billion, witnessing mammoth tax shortfall of Rs173 billion in the ongoing financial year.With this massive shortfall, the possibility of achieving the desired target of Rs4,398 billion for current fiscal year 2018-19 becomes highly impossible without taking additional revenue measures.The budget deficit target of 5.1 percent of the GDP is going to be missed with huge margin in prevailing scenario and it might touch 7 percent mark with existing projections in gap between revenues and expenditures side of the government.The FBR has not yet officially released any revenue collection figures arguing that the FBR authorised its tax offices and designated bank branches to collect taxes till midnight on Monday so the revenue figures will be shared on Tuesday (today). But initial reports suggest that the FBR is all set to witness major revenue shortfall. The FBR had collected Rs1380 billion in first five months and was facing shortfall of Rs100 billion.For December 2018, the FBR envisaged tax target of Rs479.79 billion but so far provisional collection stood at Rs350 billion so the total collection of first half could collect only Rs1,730 billion against the desired collection target of 1948.7 billion. The FBR had collected Rs417 billion in last December 2017. One FBR official said that the collection for December 2018 could go up by few billion rupees as the tax receipts were in the process and they claimed that it might go close to Rs400 billion. Despite this the revenue shortfall of the FBR will be massive and possibility of reaching nearer to the desired target of Rs4.4 trillion becomes impossible.The FBR had envisaged collection of 19.3 percent share in first quarter (July-September) period and was vying for collection of 25 percent out of total desired target in second quarter (Oct-Dec) period but its collection witnessed such huge shortfall that the government was left with no other option but to take major tax measures for raising the tax collection growth in remaining months of the current fiscal year.

from The News International - National http://bit.ly/2Su0ZbT