Infighting: Govt fails to finalise revenue target

FBR has not yet submitted data required to set tax collection targets.


Shahbaz Rana August 18, 2011

ISLAMABAD: Soon after embarrassing the nation by declaring misleading revenue collection figures, the Federal Board of Revenue appears to have been unable to submit enough analytical data to help the government finalise its new tax collection targets for the current fiscal year.

The Revenue Performance Group was unable to finalise any targets after it was not given the required data by the FBR’s strategic planning wing and Pakistan Revenue Automation Ltd, another FBR subsidiary.

The group was created by Finance Minister Abdul Hafeez Shaikh soon after the ‘figure fudging fiasco’ to monitor the FBR’s performance. The minister has reportedly lost all confidence in the abilities of the FBR.

A member of the group said that the group discussed numbers between the range of Rs1,850 billion and Rs1,892 billion as the possible tax collection targets but had not yet finalised a number. He added that the final number will likely fall within this range.

An FBR official, seeking to explain his organisation’s apparent complacency, said that tax officials did not want to announce a target in haste and needed more time to come up with a realistic number. He estimated the FBR would be able to finalise a number by the end of August.

In the budget passed by Parliament, the government had set itself a revenue collection target of Rs1,952 billion for the fiscal year 2012, but that number was based on the assumption that the revised target for fiscal 2011 of Rs1,588 had been met.

But when the government announced that it had only been able to collect Rs1,550 billion in 2011, the assumptions were rendered obsolete and the government has struggled to set a new target since. The previous fiscal year’s collection is used as the base for the next year’s collection target.

Published in The Express Tribune, August 18th, 2011.

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COMMENTS (3)

Meekal Ahmed | 9 years ago | Reply

@Pundit:

...and Pandit, despite your phoney name, I presume you are from next door. Given what is going on in India as I write over corruption, you have the audacity to taunt us about it.

We too have the inter-net in case you did not know that. And we know and read in the international press about the scourge of corruption in India. India is No. 1 in terms of the value of bank balances in Switzerland, at about $1.3 TRILLION. This goes to show that having foreign exchange controls never works. A crook will be a crook no matter how many obstacles you place in his/her path.

But there are many more scandals including the Olympic Games and the IT award. You know the list. I don't have to tell you.

However, I will say that at least India arrests SOME of the big fish. We do not.

Not yet.

Sorry, no job and no taunting us on corruption.

Have a lovely day/evening.

Meekal Ahmed | 9 years ago | Reply

@Pundit:

No job for you, Mr Pundit.

If you want to look at the buoyancy of the tax system it is growth of real output PLUS inflation = growth of nominal GDP at current market prices.

Moreover, 1,550 in 2011 is not necessarily the correct base. It depends on what special one-off factors were involved in arriving at that base (such as advance tax). That has to be removed and the base "normalized".

Whatever the final figure, the difference between one and the other is about 0.2% of GDP. One can hardly get excited with that so why the delay and the big fuss?

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