July-Dec collection falls short by Rs126bn

[Muhammad Omar]

AFP/File
ISLAMABAD: The Federal Board of Revenue (FBR) witnessed a shortfall of Rs126 billion in revenue collection during the first half of this fiscal year.

The collection stood at Rs1,159bn during July-Dec 2014 against the target of Rs1,285bn. However, it recorded a growth of 12.4 per cent when compared with Rs1,031bn collected in the same period last year.

A well-placed source in the FBR told Dawn that Finance Minister Ishaq Dar is reluctant to reshuffle the top managers of tax collection authority. “No one can touch them despite their poor performance because they all draw their power from the Lahori camp.”

Most of the top slots have been given to those bureaucrats hailing from Lahore or have worked in any capacity with the Sharif family members, the source remarked.

Customs duty collection witnessed a massive decline owing to rampant corruption and clearance of containers on lesser revenue.

On monthly basis, the revenue collection in December 2014 stood at Rs255bn as against the target of Rs285bn, reflecting a shortfall of Rs30bn. In December 2013 the FBR collected Rs231.54bn.

The government has projected a revenue collection target of Rs2.81 trillion for 2014-15, an increase of 24pc over Rs2.266tr collected in the preceding year.

For achieving the target, the FBR will have to collect Rs1,653bn in Jan-June 2015.

A source familiar with the tax targets and projections told Dawn that the revenue shortfall would reach Rs310bn by end June 2015 if the tax authorities have not taken corrective measures.

Last year, the target was revised four times owing to dismal performance of the tax department.

Official figures available with Dawn show that the FBR is facing problems in tax compliance as well as achieving revenue collection target for respective months.

Until December 5, 2014 only 750,000 people filed income tax returns (e-filing and manual) as against 835,000 returns filed last year, showing a decline of 10.18pc.

The government has asked the tax department to increase tax base by 50pc by bringing around 1.25 million more people under the tax roll. However, this target was missed largely with a wide margin. At the same time, it has also projected to increase the tax-to-GDP ratio to 10.2pc but it remained at 9.3pc.

Published in Dawn, January 1st, 2015

 

[Faiez]

Lower tax rates, then start collecting strictly. and lower gov. expenditure. Let the free market roll.