ISLAMABAD: The gap between the tax and collection target is continuously widening with every passing month, as the tax machinery could only generate Rs763 billion in seven months, which is less than half of the annual target, compelling the government to borrow money.
The Federal Board of Revenue (FBR), the federal tax collecting authority, netted Rs763 billion from July through January, provisional official statistics showed. With this, the FBR is facing an uphill task to collect an average Rs168.2 billion in the remaining five months of the current financial year to reach the revised annual target of Rs1.604 trillion.
The revised figure is Rs63 billion less than the original target of Rs1.667 trillion announced at the time of federal budget in June last year.
Independent economic experts and the Revenue Advisory Council had labelled the Rs1.667 trillion target ‘over-ambitious’. According to a World Bank study, Pakistanis evade Rs796 billion in taxes annually.
Officials are, in fact, working once again to further revise the revenue collection target downwards to Rs1.55 trillion.
At the end of the first half in December, an average Rs157.5 billion per month was required to be collected to meet the revised target and that too at a time of economic meltdown, power outages and political instability. The FBR’s inability to achieve the January target has increased the average monthly collection target to Rs168.2 billion.
In January, tax collection target was missed by Rs19 billion. Against the target of Rs123 billion, tax authorities collected around Rs104 billion, figures showed. Last month, the FBR collected Rs31 billion in direct taxes, which was less than 30 per cent of the total monthly collection.
On account of sales tax, the major revenue spinner, the FBR collected Rs50 billion. Under the head of federal excise duty, the collection remained at Rs9 billion, whereas the authorities collected Rs14 billion on account of customs duties.
Out of Rs763 billion netted in the July to January period, the authorities collected Rs271.6 billion in direct taxes, which was 35.6 per cent of the total collection. An amount of Rs331 billion was generated on account of sales tax, which was 44 per cent of the total collection.
Federal excise duty collection stood at Rs66.5 billion, while customs duty collection remained at Rs94 billion.
Published in The Express Tribune, February 2nd, 2011.
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