FBR faces uphill task of collecting Rs54b in five days

Receives Rs86.5b in taxes by Jan 26 against target of Rs140b.

ISLAMABAD:

As uncertainty looms over appointment of a new chairman, the Federal Board of Revenue (FBR) is facing a gigantic task of collecting Rs54 billion in taxes in five days to keep pace with the first half as a failure is likely to widen the gap between income and expenses of the country.

Sources told The Express Tribune that in 26 days of January the FBR got Rs86.5 billion in taxes, Rs391 million or 0.4 per cent less than the corresponding period of last year. It is probably for the first time in the current fiscal year that tax collection has slipped into the negative zone. However, these are provisional figures and are likely to increase in coming days.

The FBR needs to collect Rs54 billion more to catch the Rs140 billion target for January and to match the figure of January 2011 it has to collect another Rs22 billion. Of the collection so far, direct taxes accounted for Rs20.1 billion, Rs5.5 billion or 21.6 per cent less than the same month last year.

In the current fiscal year 2011-12, the FBR is targeting to raise taxes worth Rs1,952 billion. Any shortfall will widen the budget deficit that has already been revised upwards to Rs995 billion or 4.7 per cent of total size of national economy.

However, at this critical time, the FBR’s affairs are being run on an ad hoc basis as chairman Salman Siddique has retired on January 20 and the government has yet to fill in the post. In the absence of the chairman, Member Strategic Planning Mahmood Alam is currently looking after the affairs.

A government notification reads, “He (Mahmood Alam) is allowed to look after day-to-day affairs of the office of the Federal Board of Revenue chairman till further orders.”

Experts question the move, saying the government has not appointed an acting chairman rather an officiating chairman who neither has powers to motivate officials nor will do so that may result in half-hearted efforts to achieve the revenue target. In this regard, Federal Finance Minister Dr Abdul Hafeez Shaikh was contacted, but he did not respond to the query.

According to tax circles, a number of aspirants for the prized slot have been trying to get blessings of relevant quarters. FBR Member Customs Mumtaz Haider Rizvi, a Grade-22 officer of the Customs Group and Aziz Ahmad Bilour, Secretary of Ministry of Industries and brother of Railways Minister Ghulam Ahmad Bilour, have been lobbying for the post. In addition to these, names of Kamran Lashari, Secretary Housing and Zafar Mahmood, Secretary Commerce have also appeared in media reports.

Overall from July through January 26, the FBR collected Rs927.2 billion in taxes, higher by 23.9 per cent compared to the corresponding period of last year. Though the growth remains healthy, it is still below the required rate of 25.2 per cent and lower than average growth of 27.2 per cent in first half (July-December).

Published in The Express Tribune, January 29^th, 2012.