FBR misses January target by Rs17 billion
Collects Rs209 billion against target of Rs226.4 billion
PHOTO: BLOOMBERG
ISLAMABAD:
After achieving last quarter’s target, tax authorities have again missed the monthly mark by Rs17 billion despite blocking the refunds of taxpayers and charging unprecedented sales tax rate on diesel.
Against the goal of Rs226.4 billion, the Federal Board of Revenue (FBR) provisionally collected Rs209 billion in January, showed results. The authorities achieved reasonable growth rate of 20.5% over Rs173.4 billion collected in the same period of last year. Nevertheless, it fell short of the pace needed to hit the monthly goal.
Pakistan faces Rs3.3 trillion revenue black hole, says IMF
Except for custom duties, the FBR missed income tax, sales tax and federal excise duty monthly targets. Custom duties collection largely improved due to increase in rates in December last year.
However, the FBR does not officially acknowledge Rs226.4 billion as the monthly target. “Our monthly target was Rs205 billion, which was worked out on the basis of average 20% growth rate and we have surpassed this target by a margin of Rs4 billion,” said Haroon Akhtar Khan, Special Assistant to Prime Minister on Revenue.
Khan said the FBR attained over 20% growth rate in January as against historical trends of 15%, which is again an achievement.
But other officials say that the target has been missed despite the refund payments being blocked by the government. It paid only Rs1 billion in refunds, which were almost 250% less than the amount paid in January last year, putting a question mark even on the credibility of Rs209 billion collection.
The gap between actual collections and (July-January) target also widened to Rs22.4 billion. Against seven months cumulative target of Rs1.616 trillion, the collection stood at Rs1.594 trillion.
For July-January period, the FBR attained 18.5% growth rate as against the required pace of over 20%.
The International Monetary Fund (IMF) has been pushing the government that refunds should not be more than Rs30 billion - a demand the government is reluctant to accept, as it uses refunds as a tool to claim higher than actual growth. The collection also fell short of the target despite charging 51% General Sales Tax (GST) rate on each litre of high speed diesel (HSD) sold in January. The HSD consumption is seven times more than petrol due to its usage in transport and agriculture sector.
Pakistan’s revenue collection surpasses target
From February 1, the government has fixed the rate of GST on all the petroleum products while accepting a proposal of Ashfaq Tola, a member of Tax Reforms Commission (TRC). However, the rate it fixed is far higher than proposed by the TRC member. The government would charge Rs29.53 per litre in lieu GST on high speed diesel, which is almost 65% of the price (which includes other taxes and dealers margins).
For the current fiscal year, the IMF has assigned Rs3.104 trillion revenue collection target.
Published in The Express Tribune, February 2nd, 2016.
After achieving last quarter’s target, tax authorities have again missed the monthly mark by Rs17 billion despite blocking the refunds of taxpayers and charging unprecedented sales tax rate on diesel.
Against the goal of Rs226.4 billion, the Federal Board of Revenue (FBR) provisionally collected Rs209 billion in January, showed results. The authorities achieved reasonable growth rate of 20.5% over Rs173.4 billion collected in the same period of last year. Nevertheless, it fell short of the pace needed to hit the monthly goal.
Pakistan faces Rs3.3 trillion revenue black hole, says IMF
Except for custom duties, the FBR missed income tax, sales tax and federal excise duty monthly targets. Custom duties collection largely improved due to increase in rates in December last year.
However, the FBR does not officially acknowledge Rs226.4 billion as the monthly target. “Our monthly target was Rs205 billion, which was worked out on the basis of average 20% growth rate and we have surpassed this target by a margin of Rs4 billion,” said Haroon Akhtar Khan, Special Assistant to Prime Minister on Revenue.
Khan said the FBR attained over 20% growth rate in January as against historical trends of 15%, which is again an achievement.
But other officials say that the target has been missed despite the refund payments being blocked by the government. It paid only Rs1 billion in refunds, which were almost 250% less than the amount paid in January last year, putting a question mark even on the credibility of Rs209 billion collection.
The gap between actual collections and (July-January) target also widened to Rs22.4 billion. Against seven months cumulative target of Rs1.616 trillion, the collection stood at Rs1.594 trillion.
For July-January period, the FBR attained 18.5% growth rate as against the required pace of over 20%.
The International Monetary Fund (IMF) has been pushing the government that refunds should not be more than Rs30 billion - a demand the government is reluctant to accept, as it uses refunds as a tool to claim higher than actual growth. The collection also fell short of the target despite charging 51% General Sales Tax (GST) rate on each litre of high speed diesel (HSD) sold in January. The HSD consumption is seven times more than petrol due to its usage in transport and agriculture sector.
Pakistan’s revenue collection surpasses target
From February 1, the government has fixed the rate of GST on all the petroleum products while accepting a proposal of Ashfaq Tola, a member of Tax Reforms Commission (TRC). However, the rate it fixed is far higher than proposed by the TRC member. The government would charge Rs29.53 per litre in lieu GST on high speed diesel, which is almost 65% of the price (which includes other taxes and dealers margins).
For the current fiscal year, the IMF has assigned Rs3.104 trillion revenue collection target.
Published in The Express Tribune, February 2nd, 2016.