ISLAMABAD: The Federal Board of Revenue (FBR) witnessed a shortfall of more than Rs127 billion in collection for the first half of the current fiscal year.
The government faces the challenge of achieving a fiscal deficit target of 3.8 per cent of the GDP for 2016-17 owing to its lower-than-expected revenue collection so far.
Tax officials believe the situation will not be any different in January and February because of uncertainty prevailing in the economic ministries. Incumbent FBR Chairman Nisar Khan and Finance Secretary Dr Waqar Masood Khan are set to retire this month.
Finance Minister Ishaq Dar has started the search for suitable candidates for coveted posts. According to a senior official the closeness with the ruling party will play its part in the final selection.
In the first six months, the revenue collection amounted to Rs1,466bn against the target of Rs1,593bn, leaving a shortfall of Rs127bn.
Over the same period of the preceding fiscal year, the revenue collection posted paltry growth of 6.85pc in July-Dec.
In the first five months (July-Nov), the shortfall in the revenue collection was Rs116bn.
The sales tax collection amounted to Rs605bn in the first half of 2016-17, reflecting no change on an annual basis.
Three segments were identified as poor performers because of policy decisions taken during the period under review. These include five zero-rated sectors, petroleum products and the fertiliser sector.
In the first five months, the revenue collection from these three sectors fell Rs53bn to Rs98.78bn against the collection of Rs151.43bn a year ago.
Budget makers should have anticipated the fall in the collection from fertiliser and five zero-rated sectors as the year-on-year drop reflects policy decisions taken in the federal budget.
However, the drop in the collection from petroleum products is apparently justified. In the first five months, it fell to Rs88.07bn against Rs126.39bn collected over the corresponding period of the last year.
The FBR also listed some other sectors from which the sales tax collection fell by over Rs40bn in the first five months of the current fiscal year.
The direct tax collection amounted to Rs601bn in July-Nov against Rs549bn recorded a year ago, reflecting an increase of 9.47pc.
According to the FBR, the direct tax collection was poor mainly because of a fall in the revenue collection from bank interest and securities, exports, cash withdrawals, advance tax on banking transactions and advance tax on banking transactions other than through cash.
In July-Nov, the revenue shortfall in the income tax collection from these sectors was Rs14.41bn.
The finalisation of the figures for December will take this shortfall to more than Rs20bn.
The Federal Excise Duty collection witnessed growth of 13.33pc to Rs85bn in the first half of 2016-17 against Rs75bn collected a year ago.
The Customs’ collection amounted to Rs214bn in July-Dec against Rs180bn a year ago, showing an increase of 18.89pc.
courtesy : dawn news