ISLAMABAD:
Tax collection in January has fallen Rs10 to 16 billion short of the target, which may make it difficult for the government to meet budget estimates.
Sources in the Federal Board of Revenue (FBR) told The Express Tribune that according to provisional figures Rs124 billion in taxes were collected in January against the target of Rs140 billion. However, the figure was Rs15.6 billion or 14.8 per cent higher than the same month last year.
It was probably for the first time in the ongoing fiscal year that the growth in revenue collection has fallen below nominal gross domestic product (GDP) growth (12 per cent inflation plus 4 per cent GDP). According to tax experts, any growth which is above the nominal GDP rate is considered the result of FBR’s efforts.
“The figure is likely to touch Rs130 billion as some of the transactions are still in the pipeline,” said Mahmood Alam, Officiating Chairman of FBR.
The government has set budget deficit target at 4.7 per cent of total size of economy or Rs985 billion on the basis of Rs1,952 billion tax collection. Any shortfall in tax revenues will widen the gap by the same amount.
In first half (July-December 2011) of the current fiscal year, the FBR managed to achieve average growth of around 25 per cent. It needs to keep the same growth rate to achieve the full-year target. Last year, tax collection stood at Rs1,556 billion.
Analysts express fear that in the absence of a full-fledged chairman, the FBR may not be able to reach the tax target. Former chairman Salman Siddique retired on January 20 and the government has yet to appoint a new chief.
However, in seven months the FBR has managed to maintain the 25 per cent growth rate on the back of a strong performance in the first half. From July through January, it collected Rs964 billion, higher by Rs194 billion or 25.2 per cent than the corresponding period of previous year.
Published in The Express Tribune, February 1st, 2012.
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@Ali Mir: I agree with you. Some one needs to seriously look at this gimmics of getting getting Huge taxes from large Government organisations and then refunding it in 4-6 days after end of the quarter. TCP,State Life and Banks are the biggest culprits. SECP should look into this and so should stock exchanges.Loss of interest etc is there plus these corporate entities become parties to FBR's mis-deeds of false tax reporting.
How long will TCP pay tax in advance for few days and get refund after 2-4 days to meet the tax collection target. Tax department forces big companies to pay advance tax in advance( March instalment paid in December). SECP should audit this.This is sheer bad governance and against code of corporate governance.
This is suppose to be a surprise or for that matter even news?