Punjab misses tax collection goal

Published: September 14, 2019


LAHORE: The Punjab government missed its tax collection target in July, costing the provincial kitty Rs.20.45billion.

According to the details, the provincial government collected Rs.11.91billion, down by 63% from its target of Rs.32.33billion.

Economic experts associate the reduction in tax collections with the fiscal crisis that currently grips the country. “If the economy remains in this condition, revenue will continue to fall,” said one expert.

Several factors, including lower than usual property tax, irrigation tax, income tax, and land revue, contributed to the overall shortfall. During July, the Federal Board of Revenue (FBR) collection under stamp duty, property tax, irrigation tax, income tax, and land revenue fell by 20.41%, due to which the tax authority was only able to bag Rs.5.38billion instead of Rs.6.76billion.

Similarly, a reduction of 22.16% in property transfer, professional tax, professional excise, and other indirect taxes resulted in a shortfall of Rs. 0.73billion.

The provincial exchequer received another blow in lower than expected collection of sales tax and other indirect taxes. Out of the Rs.13.87billion, only Rs.318.6million ended up in the provincial coffers.

While Punjab had dreary fiscal news from every nook and cranny, the transportation, housing and planning departments managed to collect more than their tax target.

In the energy sector, the province witnessed a decrease of 98.24% in tax collections. Under the non-tax revenue, there was a decrease of 54.29% in the collection. The department of finance also collected Rs.4.22billion less than its target of Rs.7.78billion.

Other provincial departments also noted a sharp decline in the tax collection. Cooperative only managed to collect 24% of its target.  Similarly, the department of finance reported a shortfall of 92.6%.

The interior, industry, irrigation, and police, also missed their revenue targets by significant margins.

The sagging provincial revenue collection figures go against the Pakistan Tehreek-e-Insaf government’s central economic mission of eliminating the nationwide shortfall in taxes.

In its fiscal budget for 2019-2020, the central government emphasized on increasing revenue through taxes. And to achieve its targets, the government is willing to try every possible trick in its book.

Experts believe, slowing economic growth will result in lower revenues for the government.  And if current trends continue, the government revenue receipts will fail to match the budgeted targets.

Official sources, meanwhile, also confirmed that the targets were not being met due to the current economic crisis. However, they were hopeful that the coming year would yield better results and bring in greater revenue through taxation. In addition to the taxation department, the Board of   Revenue’s recovery target was Rs81 billion.

Published in The Express Tribune, September 14th, 2019.

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