No major breakthrough in revenue generation is expected during the current fiscal, said well-placed sources at the Regional Tax Office (RTO) of the Federal Board of Revenue (FBR). "It would be a big achievement even if it increased by 3 to 4 percent comparing to the last fiscal year," they added.
They said no big spending under the Public Sector Development Programme (PSDP) is likely to take place during the remaining period of the current fiscal. Also, they added, one should not measure the performance of the government in terms of revenue collection for the current fiscal as they are focusing on growth-led policies right now that would automatically lead to revenue generation. According to these sources, only the next year would be the right time to judge the performance of the government on revenue collection.
They said the previous government of PML-N had not revised rates of utilities over the last three to four years that has added pressure on the present government, as any increase in the utility charges will lead to increase in production cost of the industry that ultimately slows down the growth and revenue generation process.
Furthermore, they said, continuous payment of capacity charges of closed units of power generation besides the ever-burgeoning circular debt has crippled growth in revenue generation. It may be noted that the FBR has been facing massive revenue shortfall of Rs237 billion in first eight months (July-Feb) period of the current fiscal year as the collection stood at Rs2328 billion against assigned target of Rs2565 billion.
The prevailing Indo-Pak tension has added fuel to the fire, as the FBR sources take it as a negative impact on economic activities. Now it is becoming difficult for the FBR to achieve the desired annual tax collection target of Rs4398 billion for the current fiscal year 2018-19. In February 2019, the FBR collection fetched Rs268 billion against the fixed target of Rs314.070 billion for the month.
The FBR's high-ups argued that the ongoing tension with India resulted into drop in tax collection in last three days of February 2019 because even Goods Declarations (GDs) were not filed by the importers by end of the ongoing month. Meanwhile, the Federal Finance Minister has also ruled out any cut in revenue target for the current fiscal year, hoping to achieve it by the end of current fiscal year.
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