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Tax collection fell 5.8pc in November

Tax collection fell 5.8pc in November

ISLAMABAD: The revenue collection fell around 5.8 per cent year-on-year in November to Rs212 billion, according to provisional figures available with Dawn.

In October, the revenue collection stood at Rs233.7bn, a shortfall of Rs22.3bn against the target of Rs256bn. The shortfall was Rs59bn in the first quarter (July to September) of this fiscal year.

One reason behind the successive shortfalls was the unprecedented payment of sales tax refunds to exporters during the last few months, a tax official said.

In August, the government paid out around Rs25bn exclusively to exporters to clear mostly outstanding refunds.

Over and above this figure, the Federal Board of Revenue (FBR) has released over Rs23bn of sales tax refunds of all taxpayers through the newly installed electronic transfer of refund system. Last year in November, the FBR paid only Rs3bn in refunds.

The FBR expected to receive Rs1bn to Rs2bn under the income tax when the revenue figures were finalised in the next few days, the tax official said.

Despite shortfalls, the FBR seems less worried as Pakistan is no more under the International Monetary Fund’s programme.

Another reason, pointed out by Finance Minister Ishaq Dar, for the shortfall in revenue collection was no change in oil prices for the past few months. A whopping Rs18bn loss was witnessed in the sales tax collection as petroleum prices remained steady in the July-September quarter.

To achieve the target in the current fiscal year, the FBR will now have to record a growth over 20pc in the next seven months.

The focus of the tax department will now be on six withholding taxes for which it will have to make extra efforts. Several small measures in income tax, sales tax and federal excise duty will also be taken to boost the revenue collection.

About Rs391bn of income tax was stuck in court litigation. Usually the settlement of such cases takes at least four months. This is another area which can help to get extra billions, the tax official said.

Another area with a revenue shortfall was the withholding tax collected on banking transactions.

The only reason for the shortfall was a slowdown in property transactions because of the upward revision in valuation tables. “We are expecting the resumption of property transactions in the months ahead,” the tax official said.

The government is also considering a tax amnesty scheme for property owners at a special tax rate of 3pc. This will also help the FBR to pocket extra billions.

Two new automation systems in sales tax have been introduced to plug loopholes that caused a revenue loss of billions of rupees. “We are expecting better revenue because of these measures,” the tax official said.

courtesy: dawn news

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