The Federal Board of Revenue (FBR), according to provisional figures, has collected over Rs 40 billion during the first month of 2007-08, against Rs 49.932 billion of the corresponding period of last year, reflecting a decrease of Rs 9.932 billion.
Sources told Business Recorder on Tuesday that the board has decided not to release official figures of provisional revenue collection on July 31. The figures would be released in a couple of days, following analysis of provisional collection during the board-in-council meeting on August 1.
The revenue collection of over Rs 40 billion in July relates to data collected up to July 30, and collection is likely to improve on compilation of final figures in the coming days.
Sources said that the law and order situation and floods had not affected revenue collection during 2007-08. Traditionally, low collection is witnessed in the first month of every financial year, which gradually improves in subsequent months.
They said that revenue collection of July 2007 would not reflect the federal excise duty (FED) collected during this period due to change in the mode of FED collection in the 2007-08 budget. Prior to the budget, time for payment of FED was different from sales tax. In order to harmonise the two taxes, the payment of excise duty was linked with the time of supply of excisable goods to facilitate reconciliation of sales tax and FED on monthly basis.
Similarly, time for payment of FED was synchronised with the time for payment of sales tax. Therefore, excise duty would be deposited by the 15th of the following month. An amount of Rs 5-6 billion of FED for July would be deposited with the returns to be filed by August 15, 2007. This amount would be reflected in revenue collection of August.
According to sources, the board has not suffered any shortfall in revenue collection in July 2007, as whatever is collected in July would be considered as target during the first month of 2007-08. Secondly, sources further said that the board has not yet framed monthly break-up of tax projections of Rs 1.025 trillion.
Contrary to this, it seemed that the FBR is facing shortfall in revenue collection during July 2007 despite the claim that it has yet not fixed monthly revenue collection target. The low collection is evident from the fact that the board has postponed release of figures till August 1. During last fiscal, overall revenue collection of July 2006 had been Rs 49.932 billion against the target of Rs 39.5 billion, reflecting a growth of 3.5 percent.
The quarter-wise revenue targets are usually fixed during the first month of every fiscal tear, which would give a clear picture to the FBR Wings for meeting the projected targets.
Secondly, the board is facing major shortfall in customs duty collection during the first month of 2007. The performance of customs duty remained poor throughout the last fiscal 2006-07 and it seemed that the same trend has been observed in July 2007. The board has already warned the customs to check under-invoicing and misdeclaration causing huge loss to the national exchequer.
During President Musharraf''s visit to the board in March, he had directed the customs authorities to take immediate measures for controlling evasion of customs duty at the import stage.