Revenue shortfall rises to Rs287b
Nearly 2.2 million filed their income tax returns until the last working day
ISLAMABAD:
Despite two downward revisions, the revenue collection for the first half of the current fiscal year has shown a shortfall of Rs287 billion.
For the first half (July-December) of the current fiscal year, the FBR’s reduced target was Rs2.367 trillion.
The FBR has collected Rs2.080 trillion by this time for the half year ended December 31, 2019, tweeted FBR Chairman Shabbar Zaidi on Tuesday.
He added the collection was 16% higher than the same period of last fiscal year.
On the insistence of the IMF, the federal government had set the FBR’s tax collection target at Rs5.555 trillion or 12.4% of GDP. The target was set keeping in view the projected Rs4.150 trillion collections during the last fiscal year, which actually dipped to Rs3.829 trillion.
Moreover, the FBR also gave another extension in filing annual income tax returns for tax year 2019 after the number of return filers remained below the last year’s level of nearly 2.7 million people.
Nearly 2.2 million filed their income tax returns until the last working day.
The collection was 16% or Rs285 billion higher than the previous year. However, it was largely the result of blocking exporters’ refunds and enhanced sales tax collection on domestic sales of garments.
During the first half of the last fiscal year, the FBR had collected Rs1.795 trillion.
The Rs2.080 trillion figure was slightly lower than what Pakistan had communicated to the IMF.
The growth in revenue collection in the first six months was slightly above the nominal GDP growth rate of 15%.
However, the FBR believes that its efforts were undermined due to imports compression, as there was a healthy growth of over 20% at the domestic stage.
In December alone, the FBR provisionally collected Rs462 billion -- up by 12.2%. But it was short of monthly target by Rs76 billion.
The FBR has missed the July-December tax collection targets of income tax, sales tax, custom duties and federal excise duties despite slapping Rs735 billion additional taxes and imposing 17% sales tax on local sales of five export-oriented sectors.
Against the six-month target of Rs858 billion, the FBR provisionally collected gross Rs790 billion income tax -- missing the target by Rs68 billion.
However, as compared to the last year, there was an increase of Rs108 billion in income tax collection, showing a growth rate of 16%.
Sales tax collection stood at Rs891 billion as against the target of Rs950 billion, falling short of the target by Rs59 billion despite blocking sales tax refunds.
As compared to the last year, the sales tax collection was higher by Rs190 billion or 27% largely due to slapping of 17% sales tax on domestic sales of textile, surgical, leather and sports goods and blocking of refunds to the tune of nearly Rs100 billion.
The custom duties’ half year target was Rs414 billion; however, the collection remained at Rs325 billion, missing the target by Rs89 billion.
Similarly, the federal excise duty collection stood at Rs126 against a target of Rs144.4 billion -- a fall of Rs18 billion.
Out of gross collection of Rs2.132 trillion in six months, refunds amount to Rs53 billion, leaving net collection of Rs2.080 trillion.
Despite two downward revisions, the revenue collection for the first half of the current fiscal year has shown a shortfall of Rs287 billion.
For the first half (July-December) of the current fiscal year, the FBR’s reduced target was Rs2.367 trillion.
The FBR has collected Rs2.080 trillion by this time for the half year ended December 31, 2019, tweeted FBR Chairman Shabbar Zaidi on Tuesday.
He added the collection was 16% higher than the same period of last fiscal year.
On the insistence of the IMF, the federal government had set the FBR’s tax collection target at Rs5.555 trillion or 12.4% of GDP. The target was set keeping in view the projected Rs4.150 trillion collections during the last fiscal year, which actually dipped to Rs3.829 trillion.
Moreover, the FBR also gave another extension in filing annual income tax returns for tax year 2019 after the number of return filers remained below the last year’s level of nearly 2.7 million people.
Nearly 2.2 million filed their income tax returns until the last working day.
The collection was 16% or Rs285 billion higher than the previous year. However, it was largely the result of blocking exporters’ refunds and enhanced sales tax collection on domestic sales of garments.
During the first half of the last fiscal year, the FBR had collected Rs1.795 trillion.
The Rs2.080 trillion figure was slightly lower than what Pakistan had communicated to the IMF.
The growth in revenue collection in the first six months was slightly above the nominal GDP growth rate of 15%.
However, the FBR believes that its efforts were undermined due to imports compression, as there was a healthy growth of over 20% at the domestic stage.
In December alone, the FBR provisionally collected Rs462 billion -- up by 12.2%. But it was short of monthly target by Rs76 billion.
The FBR has missed the July-December tax collection targets of income tax, sales tax, custom duties and federal excise duties despite slapping Rs735 billion additional taxes and imposing 17% sales tax on local sales of five export-oriented sectors.
Against the six-month target of Rs858 billion, the FBR provisionally collected gross Rs790 billion income tax -- missing the target by Rs68 billion.
However, as compared to the last year, there was an increase of Rs108 billion in income tax collection, showing a growth rate of 16%.
Sales tax collection stood at Rs891 billion as against the target of Rs950 billion, falling short of the target by Rs59 billion despite blocking sales tax refunds.
As compared to the last year, the sales tax collection was higher by Rs190 billion or 27% largely due to slapping of 17% sales tax on domestic sales of textile, surgical, leather and sports goods and blocking of refunds to the tune of nearly Rs100 billion.
The custom duties’ half year target was Rs414 billion; however, the collection remained at Rs325 billion, missing the target by Rs89 billion.
Similarly, the federal excise duty collection stood at Rs126 against a target of Rs144.4 billion -- a fall of Rs18 billion.
Out of gross collection of Rs2.132 trillion in six months, refunds amount to Rs53 billion, leaving net collection of Rs2.080 trillion.