Inside Financial Markets

FBR may fall short of Rs100bln against annual tax target

The Federal Board of Revenue (FBR) is likely to face Rs100 billion in revenue loss as compared to the tax target set for the outgoing fiscal year, officials said on Monday.

“FBR should collect Rs3,421 billion instead of Rs3,521 billion till June 30,” said a top official. The official said efforts, however, are being made to touch Rs3,450 billion and, “it should be considered as an achievement.”

If compared with the initially-envisaged target of Rs3,621 billion the revenue loss would be Rs200 billion for the fiscal year, ending June 30, 2017. The government revised down the target to Rs3,521 billion.

Officials said various relief measures, taken by the government in shape of reduced petroleum prices, tax incentives on fertiliser, export package and others caused revenue loss to the tune of Rs170 billion in the first eleven months (July-May) period of 2016/17.

The tax machinery collected Rs2,860 billion in July-May.  The FBR will have to collect Rs561 billion in June to meet the target. There are increased numbers of holidays and short working hours in Ramazan and Eid-al-Fitr.

But, there have been exceptions in the past. FBR collected Rs465 billion in June 2016 and Rs381 billion in 2015. An official said the government decided to defer new valuation rates for property till the starting of the next fiscal year. “Now, we will jack up valuation rates for property for 15 to 20 major urban centers in the first ten days of July,” he added.

On withdrawal of zero-rating for five major export-oriented sectors, the official confirmed that the government was considering withdrawal of this facility, because the zero rating was allegedly misused by certain quarters as some of them were seeking refunds on packaged material despite an agreement that they would not seek such refunds.

Meanwhile, Finance Minister Ishaq Dar directed FBR to take all necessary measures to meet the tax collection target for the current fiscal year. “The prudent policies of the present government, and the efforts of FBR, had resulted in 60 percent growth in tax revenue collection between FY 2012/13 and FY 2015/16,” Dar said in a statement.

Minister Dar was speaking at a meeting on Sunday at the ministry of finance on matters related to FBR. Haroon Akhtar Khan, special assistant to prime minister on revenue, Muhammad Irshad, chairman of FBR and senior officials of the finance ministry attended the meeting.

Irshad said all efforts are being made to attain the collection target for the current fiscal year. Sources said the apex tax authority was mulling to attach bank accounts of tax defaulters in a desperate move to meet the target.

FBR chairman Irshad said a comprehensive strategy is being finalised for the tax collection during the next fiscal year. Minister assured his full support to FBR for achieving the revenue targets for 2017/18.  He appreciated the contributions of FBR officials in the preparation of the budget for 2017/18, which has recently been passed by parliament.

Baqar Hussain

A Wannabe CFO, just had stepped in the corporate sector, willing to explore every aspect here and learn as mush as i can, awareness for those who dont, get the info where ever possible and stay up to date always.

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Inside Financial Markets was a joint publication of Pakistan Stock Exchange (PSX)and Society of Technical Analysts Pakistan (STAP)