ISLAMABAD: Following change in macroeconomic figures, the Federal Board of Revenue (FBR) has faced a shortfall of Rs91 billion in achieving the tax collection target of the first quarter (July-September) period as the tax authorities could fetch only Rs2,563 billion.
Sources told Business Recorder that the FBR had collected Rs9.299 trillion in last fiscal year 2023-24 and envisaged to collect Rs12,913 billion for the current fiscal year.
There were assumptions that the policy measures in the shape of raising tax rates would yield Rs1,190 billion, enforcement measures Rs320 billion including Rs50 billion through retailers’ scheme, materialising revenues from Sindh and import plus LSM growth was projected to yield Rs2,047 billion.
Additional revenue collection: Benefits must be passed on to public: PM
It was envisaged that the FBR would materialise a revenue growth by 27 per cent in the current fiscal year to display its desired tax collection target.
With changed macroeconomic numbers, the FBR had to face a shortfall on sales tax at import stage by Rs147 billion.
The income tax collection has gone up to Rs1,230 billion against the set target of Rs1,098 billion for the first quarter. The FBR fetched Rs54 billion due to increase number of income tax return filers during the current fiscal year. However, the phenomena of NIL/Null filers were still on higher side and stood at 2.9 million.
According to officials, the macroeconomic figures have witnessed a major revision including real GDP growth and CPI-based inflation so nominal growth numbers altered during the first quarter (July-September) period, which is now resulting in surfacing major tax shortfall of FBR projected to remain around Rs321 billion for the first half (July-December) period as well as in failing to fetch the non-tax collection target with wide margin of Rs100 to Rs200 billion. Both the tax and non-tax shortfall might result into surfacing a gap of Rs500 to Rs600 billion on fiscal front in the first half of the current fiscal year.
They said that the macroeconomic framework witnessed major shift and cited examples that the economic assumptions used for envisaging targets changed. The CPI-based inflation was targeted at 12.9 per cent but it fell to 9.2 per cent in the first quarter (July-September) period and even it further reduced to 6.7 per cent for the last month (September 2024). The imports were projected to grow at 16.9 per cent but it nosedived to eight per cent in the first quarter.
The Large- Scale Manufacturing (LSM) growth was envisaged at 3.5 per cent but it fell and stood at 1.3 per cent at current levels. The real GDP growth was envisaged at 3.5 per cent on eve of budget making but now it was revised downward and projected to stand at three per cent for the current fiscal year.
Copyright Business Recorder, 2024
Comments