ISLAMABAD: The Federal Board of Revenue may suffer a shortfall of around Rs. 100 billion in tax collection against an ambitious target of Rs. 1.07 trillion.
It was a few days back when the technical team from the International Monetary Fund had a meeting with the FBR officials to evaluate the financial forecasting and cash management. The purpose of the evaluation was to assist Pakistani tax collectors in the execution of the new Public Finance Management Act 2019.
The team from IMF questioned the rationale behind the high monthly revenue targets. The team was skeptical of FBR taking advances to meet its targets. However, the tax collectors insisted that they were not taking advances to meet the targets.
According to sources the Revenue Board took roughly Rs. 15 billion in advances in August and it was again trying to receive advances this month for covering the widened gap between tax collection and the set target.
As of Thursday, the Board could potentially generate Rs. 845 billion in taxes, whereas, it has to collect another Rs. 228 billion of taxes in the next two working days before the month ends. According to the sources, the collection target is going to be missed by a margin of around Rs.100 billion.
“In the last fiscal year, the FBR had collected Rs3.829 trillion in taxes. The government took Rs735 billion worth of taxation measures in the current year’s budget while the nominal GDP growth is projected at 15% (3% real GDP plus 12% inflation), which will help collect additional taxes of Rs574 billion,” Ashfaq Tola, a member of the government’s Tax Reforms Implementation Committee.
“After taking into account the impact of 15% nominal GDP growth and Rs735 billion worth of taxation measures, the FBR could not collect more than Rs5.14 trillion in the current fiscal year”, added by Ashfaq Tola, a member of the government’s Tax Reforms Implementation Committee.
