The Federal Board of Revenue (FBR) has reportedly informed the finance minister that the revenue collection would remain not more than Rs4,100 billion in ongoing financial year; it is learnt. According to sources, the FBR apprised the finance minister that revenue collection would not reach beyond Rs4,100 billion in current fiscal year and requested him to make downward revision in annual budgetary revenue target of Rs4,398 billion.
However, the government has neither taken any policy measure in Finance Supplementary (Second Amendment Bill) 2019 nor made downward revision in annual budgetary revenue target so far.
Presently, the revenue shortfall is roaming around over Rs190 billion during seven months and this reform package announced through Finance Supplementary (Second Amendment Bill) 2019 will create additional over Rs50 billion negative impact on revenue collection by the end of current financial year, sources said.
They said that board in its latest departmental communication expressed dissatisfaction over considerable revenue shortfall reported by majority of the field formation and termed it unacceptable.
Replying to a question, sources said that field formation had no option but to initiate massive audit exercise to raise huge tax demands against taxpayers to meet the targets but the same would be considered as harassment.
"We have no other option because the board has now directed all field formation that the target for the current month has to be achieved at all cost," sources said.
To another question, sources said that incentives provided for salaried class, massive reduction in utilization of Public Sector Development Programme (PSDP), suspension of withholding tax on mobile phone usage and low sales tax collection on petroleum products were the reasons behind current myriad revenue shortfall.
Furthermore, sources said that the general sales tax (GST) rates on M.S was 8 percent and on HSD was 13 percent till December 2018, which also caused decline in revenue collection by 37 percent and 37.26 percent respectively and the board had to face Rs43 billion shortfall at import stage on POL products.
They further said that the government had now brought GST rates to 17 percent in January, which reflected a healthy impact on revenue collection (11.5 percent on M.S and 18.66 percent on HSD).
Sources said the government had also been urged to bring GST to 20 percent on M.S & 30 percent on HSD to meet the revenue target but no changes were made in the GST rates on POL products so far. Therefore, the board is now expecting Rs. 31 billion additional GST loss on the said commodity during January 2019 to June 2019 period. Keeping the said in view, the annual target of Rs 4,398 billion appears formidable to achieve and the FBR by utilizing all its capacity will not collect more than Rs. 4,100 billion in ongoing financial year, sources maintained.
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