Web Desk – October 01, 2019
ISLAMABAD: The Federal Board of Revenue (FBR) missed revenue collection target for the first quarter of current fiscal year by a wide margin of Rs111 billion against the target of Rs1,071bn despite several measures and double-digit consumer inflation.
The trend in revenue collection shows that the quantum of shortfalls is constantly increasing with each passing month starting from Rs14 billion in July to Rs47bn in September — last month of first quarter.
FBR Chairman Shabbar Zaidi told Dawn that the revenue body has managed to provisionally collect Rs960bn in the first quarter of current fiscal year as against the target of Rs1,071bn projected for the same period.
He said that some more positive adjustment is expected. However, he also added that the FBR has paid past refunds worth Rs15bn during the first quarter as well.
Return filing deadline extended to Oct 31
He claimed that tax collection of up to 90 per cent of highly aggressive target for quarter ended Sept 30 has been achieved.
Meanwhile, the FBR on Monday also extended the last date for filing of income tax returns/statements for the tax year 2019 until Oct 31. The extension is available to all individuals (salaried and non-salaried), association of persons and companies.
The FBR has received as many as 438,564 returns until Sept 30 as against 408,381 returns received over the corresponding month last year, showing an increase of 7.4pc. Last year, the FBR received 2.6 million returns after granting eight extensions.
The FBR has set a target of 5m returns in the current fiscal year.
The shortfall could have been much higher in case the FBR had not lowered its first quarter revenue target to Rs1,071bn from Rs1,111bn, a straight reduction of Rs40bn.
Prime Minister Imran Khan removed the former FBR chairman in May as it became clear to him that the revenue collection was heading towards a record shortfall. To achieve the ambitious revenue target of Rs5.55 trillion, PM Khan on May 10 appointed Shabbar Zaidi from the private sector as the FBR chairman to reverse the downward trend in revenue collection.
For the first review under the International Monetary Fund programme, the FBR was supposed to collect Rs1,071bn in the first three months of current fiscal year. However, the collections during the period have missed the target by a wide margin.
FBR chairman told Dawn that the import contraction is around $3bn during the first quarter. The effect of that is around Rs125bn, he said, adding this shows that target has been met.
He said that import contraction is much higher than the earlier projections. “We will take up this issue with the IMF team”, he said, adding the overall drop in import is good for the balance of payments.
He said the domestic tax collection has posted a growth of 25pc in the first quarter over the last year. “This is an impressive growth”, Zaidi said. However, a significant portion of this increase can be attributed to the 10pc rise in inflation from the same months last year.
He said the FBR has managed to achieve around 90pc of the first quarter target.
The customs collection has fallen short of target by Rs37bn, as the collection amounted to Rs152bn in the first quarter against the target of Rs189bn.
Inland Revenue Tax — income tax, sales tax and federal excise duty (FED) — posted a massive shortfall of Rs74bn in the first quarter. The shortfall is more in the income tax collected followed by sales tax mostly at import stage and federal excise duty.