Overambitious target?

Targets are bound to go unmet – well, only if we are talking of the targets set by our economic managers. The latest economic survey – a disconcerting story of our elusive targets for the outgoing financial year – substantiates the point. The shortfall in targets had mainly to do with the economic slowdown resulting from a host of issues, including political uncertainty as well. Braced for the new financial year now, the most challenging of the targets is revenue collection. At Rs5,550 billion, the target for FY20 i.e. the incoming financial year, is already up by 39 per cent in comparison with Rs4,398 billion in FY19.

That the FY19 tax collection is already short of Rs1,088 billion – with just one month left for the financial year to complete – raises serious questions as to the capability of our tax machinery to collect an additional 39 per cent in taxes, especially in view of the growing political uncertainty that does not augur well for business and trade. At a time when even ‘business as usual’ is difficult to carry out, Rs5,550 billion tax collection would be an unusual feat.

The unrealistic target is said to reflect the desperation of the government to win over the IMF whose executive board has still to ratify the staff-level agreement for a $6 billion financial bailout package. No wonder the government’s economic managers are ready to go all out in pursuit of the overambitious target, amid high probability of protests by various business associations against the budget.

Finance Adviser Dr Abdul Hafeez Shaikh says that if need be, the government will not hesitate to ‘offend some people’ in the context. He, however, insists that the target is achievable. FBR Chairman Shabbar Zaidi is optimistic too. When he says that the government has “moved from traditional system to sectoral analysis [to figure out] which of the industries or sectors are paying less taxes than they should”, what he appears to mean is that the government has done its homework and is right on the target. Had it just been a matter of will, chances of success would have been there, but it’s more about a clear vision and the capacity to deliver.

Published in The Express Tribune, June 14^th, 2019.

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