ISLAMABAD: The Federal Board of Revenue faced a shortfall of Rs73 billion in revenue collection during the first five months (July-Nov) of this fiscal year 2014-15.
The collection stood at Rs900bn against the target of Rs973bn. However, it recorded a marginal growth of 14 per cent over the last year’s collection of Rs789bn. The growth in revenue collection was the outcome of the withholding taxation measures introduced in the budget 2014-15. The payment of refund/rebate rose to Rs34bn during the period under review against Rs27bn in the corresponding period last year.
The government for this fiscal year has projected a revenue collection target of Rs2.81 trillion, 24pc higher than Rs2.266tr collected in the preceding year. Last year, the target was revised four times owing to dismal performance of the tax department.
Official figures available with media show that FBR is facing problems in tax compliance as well as achieving revenue collection target for respective months. Until November 25, only 560,000 people have filed income tax returns (e-filing and manual) in the tax year 2014, as against 835,000 returns filed last year, showing a decline of 32.94pc. In other words, 275,000 people, who filed their returns last year have not yet filed their returns.
On monthly basis, a shortfall of Rs18.90bn was witnessed alone in the month of November 2014 as revenue collection stood at Rs175.101bn as against the target of Rs194bn. However, the collection grew by 15pc over the collection of Rs151.712bn in November 2013. The government has asked the tax department to increase tax base by 50pc by bringing around 1.25 million more people under the tax roll. However, this target was missed largely with a wide margin. At the same time, it has also projected to increase the tax-to-GDP ratio to 10.2pc but it remained at 9.3pc.
A tax official said the general sales tax (GST) witnessed decline in November 2014 because of decline in oil prices in domestic market. “We have not predicted this massive decline in oil prices while projecting revenue collection target,” the official said.
More decline in the GST from the oil sector is expected in December 2014 because of the proposed slash in oil prices, the tax officer added. Tax wise break-up showed income tax collection witnessed a growth of 23.69pc to Rs329bn in July-November 2014 as against Rs266bn in the same period last year. The sales tax collection also rose by 8.65pc to Rs440bn against Rs405bn collected in the same period last year.
The customs duty collection reached Rs107bn during the period under review as against Rs88bn over the corresponding period of last year, an increase of 21.59pc. However, the federal excise duty collection remained stagnant at Rs58bn against Rs56bn, reflecting dismal performance despite increase in excise rate for beverages and cigarettes.