ISLAMABAD: The Federal Board of Revenue will have to collect Rs 1,652 billion in remaining six months (January-June) of the ongoing financial year achieve the annual tax collection target of Rs2.81 trillion while the government has yet to revise the revenue target as it is likely to face a shortfall of Rs 68 billion owing to reduction in oil prices in the country.
According to reports, the PML-N government is struggling to achieve the annual tax collection target of Rs 2.81 trillion despite it had introduced heavy taxation measures worth of Rs231 billion in the annual budget. The FBR has missed the revenue collection targets during first six months of current financial year 2014-2015.
The board has collected Rs1,158 billion during first half (July-December) of FY 2015 as against the target of Rs 1,195 billion, leaving shortfall at Rs 37 billion in the period under review. Pakistan had set tax collection target of Rs 1,195 billion for the end December with the International Monetary Fund (IMF). Meanwhile, the FBR failed to achieve the target set by government, which was Rs1,246 billion.
Prime Minister Nawaz Sharif last week briefed the media that government would face revenue shortfall of Rs 68 billion due to the massive reduction in oil prices in the country during current fiscal year. He informed, therefore, the government has increased the General Sales Tax (GST) on petroleum products by five percent to 22 percent with effect from January 1 2015. “Despite the increase in GST, which will yield Rs17 billion, the prices of petroleum products have reduced significantly,” he said.
Sources in FBR informed that government could not achieve the target of Rs 2.81 trillion despite enhancing GST on petroleum products.
The FBR would have to collect Rs 1,652 billion in remaining six months (January to June) of the ongoing financial year, which seems difficult to achieve.
The government would either to cut the development budget or to take additional taxation measures to offset the impact of revenue collection in remaining second half of the current fiscal year, they added.
The International Monetary Fund (IMF) in latest Pakistan’s review noted that FBR might collect Rs2.756 trillion as against the target of Rs2.81 trillion, with the shortfall of Rs54 billion. However, the government has yet to downward revise the target.