Always missed targets
Sadly missed targets, especially tax revenue, remains our dominant economic narrative; so much so that no sitting government has ever surprised by meeting budgetary projections even once. And it’s no different this time as the FBR has, once again, missed its first fiscal four-month revenue target for the ongoing year. The shortfall is a staggering Rs82 billion. Yet the most likely reaction from the finance minister, if long-standing precedent is anything to go by, will be spinning this too into some kind of an achievement. Just like we were told that the last program with the IMF – when we consistently got them to revise quarterly targets to the downside — was a text book Darnomics success story.
Mention of the Fund is important since the revenue black hole will, yet again, push the government to borrowing. So far this fiscal, the FBR is well short of the 26pc of the annual tax revenue it was supposed to have collected by now (a good Rs82b short). The breakdown is no more heartening. Only 317,000 people have filed income tax returns for ’16, forcing the fifteen-day extension. Last year the eventual number was 1.07m, after a good half-dozen extensions. Perhaps there is truth, after all, to certain opposition claims that governments where senior minister don’t pay taxes will always have trouble making ordinary people pay.
Then there is the matter of political correctness. During the last dharna the government gladly took credit for the oil price ease; even though it was the result of an international Brent collapse far removed from Islamabad or PML-N. Now, though, when prices are turning (24pc since March), political considerations are clearly keeping the government from raising domestic prices. The result, as always, is a stagnated, directionless economy; drudging along slowly as long as someone is lending to it or exogenous forces are pushing projects like CPEC. Intrinsically, there’s little to write home about. And that’s unlikely to change till revenue generation undergoes a revolutionary change. But that would, unfortunately, bring us right back to taxes.
Congratulations Mr Dar & Co. Recently an Editorial remarked that the FBR itself is the biggest hurdle to meet the
to meet the target in collaboration with the 'rich mafia' of the country. The visiting IMF GM also pointed
out at our inefficient and inadequate tax-collecting system.
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