Fearing shortfall in revenue collection, Pakistan on Monday further revised the revenue collection target to Rs 2,116 bn from earlier Rs 2,193 bn, reflecting a shortfall of more than Rs 77 bn.
A well-placed official source in the Federal Board of Revenue told a local newspaper that the board would formally inform the International Monetary Fund in the next few days about revision in revenue collection target.
This will be the third straight downward revision in the revenue collection target.
First it was revised to Rs 2, 231bn for 2012-13 from earlier projected budgetary target of Rs 2, 381bn. For the second time, the revenue collection target was revised downward to Rs2, 193bn.
The revenue shortfall would be one of the major concerns for fund managers to be raised during the review of the economic indicators of Pakistan scheduled for April 17 to 22 in Washington.
In the first nine months, FBR collected Rs 1,352bn this year as against Rs 1,259bn over the corresponding months of last year, showing an increase of 7.3 percent.
According to the tax official, the new target of Rs2,116bn is still ambitious, but the FBR has no other option but to pursue it.
However, the tax official said that the new target was worked out without the revenue impact of the tax amnesty schemes.
All federal taxes are way behind from their respective targets for the current fiscal year, excluding collection from customs duties.
If the situation remains politically unstable during the post-election period, the collection of revenue in the next two months of the current fiscal year would deteriorate further.
However, the FBR is expecting that the new government after elections would announce the tax amnesty scheme which would not only raise additional revenue, but also increase the tax base to five million taxpayers.
However, it seems that the FBR may not reach closer to last year’s collection of Rs 1,883bn, which remained short by Rs 70bn of original target of Rs 1, 952bn.
The new FBR chairman, Ansar Javed, has also taken a serious notice of the fall in revenue and started marathon meetings within the FBR.
An official statement on Monday claimed that the performance of large taxpayers units (LTUs) and regional tax offices (RTOs) was examined, and the chief commissioners were directed to devolve strategies to achieve the freshly assigned budget targets.
The chairman also directed the Member Inland Revenue Service (IRS) to immediately issue letters to all RTOs and LTUs highlighting their performance and achievements / shortfalls and directed that remedial strategies be made to ensure collection of the assigned targets for the last quarter ending June 30.
The tax official said that FBR had already raised around Rs16.034bn from the regularisation of the 51,000 smuggled vehicles.
Similarly, FBR recovered around Rs4.5bn arrears from textile manufacturers.
“We are expecting that the new government will announce an amnesty scheme for taxpayers’ regularization in May,” the tax official said. In case, the new government announces the scheme, the revenue collection target would be achieved easily.