After refunds: FBR’s collection figures inflated by Rs16 billion
Net revenue collection reported at Rs583.8b, 8.5% higher than last year
Net revenue collection reported at Rs583.8b, 8.5% higher than last year. CREATIVE COMMONS
ISLAMABAD:
The Federal Board of Revenue (FBR) has over reported its revenue collection for the first quarter of the fiscal year by Rs16 billion, apparently in a bid to hide its inefficiency, raising concerns about the authenticity of official figures.
In an official handout issued on October 1, the tax authorities had claimed that the net revenue collection after paying refunds stood at Rs600 billion from July through September of this fiscal year, which was 11% higher than the collection in the comparative period.
However, data compiled by Directorate of Research and Statistics of the FBR tells a different story.
Net revenue collection was Rs583.8 billion from July through September this year, according to FBR documents. Hence, it was only 8.5% higher than the Rs537.9 billion collected in the comparative period.
The FBR’s revenue collection figures have often been disputed and it often claims higher collection by borrowing money and taking advance income tax.
For the first quarter, the FBR had set Rs647.3 billion tax collection target that was missed by a margin of Rs63.5 billion. The International Monetary Fund had also set an indicative revenue collection target of Rs640 billion for the first quarter, which has been missed by Rs56.2 billion. This will have a direct bearing on the current fiscal year’s annual revenue collection target of Rs3.104 trillion.
Due to the poor performance, the government will have to seek a waiver from the IMF during the upcoming talks, said an official of the Ministry of Finance. He said the shortfall in revenues weaken the government’s bargaining position, as the IMF may ask to levy additional taxes.
Pakistan has already given a written assurance to the IMF that it stands ready to take corrective measures, in case revenue collection falls short of the target. The growing shortfall in tax revenues is likely to result in missing the overall budget deficit target of 4.3% of Gross Domestic Product or Rs1.292 trillion for the current fiscal year.
In its recent report released this week, the IMF has already expressed its doubts about Pakistan’s ability to deliver on Rs1.292 trillion budget deficit target. It has stated that the target may be missed by a margin of 0.3% of the GDP or Rs90 billion.
Harald Finger, IMF Mission Chief to Pakistan, has already stated that the Fund will take up the issue of gap in budget deficit target during the upcoming review talks, scheduled for October 26 to November 6.
Published in The Express Tribune, October 11th, 2015.
The Federal Board of Revenue (FBR) has over reported its revenue collection for the first quarter of the fiscal year by Rs16 billion, apparently in a bid to hide its inefficiency, raising concerns about the authenticity of official figures.
In an official handout issued on October 1, the tax authorities had claimed that the net revenue collection after paying refunds stood at Rs600 billion from July through September of this fiscal year, which was 11% higher than the collection in the comparative period.
However, data compiled by Directorate of Research and Statistics of the FBR tells a different story.
Net revenue collection was Rs583.8 billion from July through September this year, according to FBR documents. Hence, it was only 8.5% higher than the Rs537.9 billion collected in the comparative period.
The FBR’s revenue collection figures have often been disputed and it often claims higher collection by borrowing money and taking advance income tax.
For the first quarter, the FBR had set Rs647.3 billion tax collection target that was missed by a margin of Rs63.5 billion. The International Monetary Fund had also set an indicative revenue collection target of Rs640 billion for the first quarter, which has been missed by Rs56.2 billion. This will have a direct bearing on the current fiscal year’s annual revenue collection target of Rs3.104 trillion.
Due to the poor performance, the government will have to seek a waiver from the IMF during the upcoming talks, said an official of the Ministry of Finance. He said the shortfall in revenues weaken the government’s bargaining position, as the IMF may ask to levy additional taxes.
Pakistan has already given a written assurance to the IMF that it stands ready to take corrective measures, in case revenue collection falls short of the target. The growing shortfall in tax revenues is likely to result in missing the overall budget deficit target of 4.3% of Gross Domestic Product or Rs1.292 trillion for the current fiscal year.
In its recent report released this week, the IMF has already expressed its doubts about Pakistan’s ability to deliver on Rs1.292 trillion budget deficit target. It has stated that the target may be missed by a margin of 0.3% of the GDP or Rs90 billion.
Harald Finger, IMF Mission Chief to Pakistan, has already stated that the Fund will take up the issue of gap in budget deficit target during the upcoming review talks, scheduled for October 26 to November 6.
Published in The Express Tribune, October 11th, 2015.