ISLAMABAD: The Federal Board of Revenue (FBR) has collected Rs9.3 trillion during the whole fiscal year 2023-24, against the original target of Rs9.4 trillion, reflecting a shortfall of Rs100 billion.
The FBR has announced to have collected Rs9,306 billion in 2023-24 against the revised target of Rs9,252 billion, thereby, exceeding the yearly target by a significant margin of Rs54 billion.
Talking to Business Recorder on Friday, renowned tax expert Dr Ikramul Haq stated, “downward revision of FBR’s target to Rs9,252 billion against the original target of Rs9,415 billion without any explanation is shocking. There is no explanation of how and when and by whom this decision was taken.
FBR exceeds revenue target by Rs54bn
“There was 27 per cent nominal growth, thus, real growth by the FBR is just three percent and not 30 per cent as claimed. The FBR has for the third consecutive year failed to meet the original target and broaden the tax base. It is thus, clear that FBR has failed to deliver.”
Prime Minister had repeatedly said at different forums that, “the country had the potential to collect revenues of over Rs 24 trillion against the annual tax target of Rs 9.4 trillion. An amount of around three times the annual revenue target was ‘going down the drain’ due to corruption, inefficiency and negligence, he added.
Dr Ikramul Haq further informed this correspondent that the FBR is publicising achieving the revised target but the historical data confirms the FBR’s consistent failure to meet targets, resulting in increased tax burdens on the masses.
He said the fixation of unachievable tax targets for FBR and then tax expenditure of as high as Rs3.879 trillion in the current fiscal year (36.4 per cent of total collection and 73 per cent higher than the last year) confirms our real dilemma. The prime minister and the finance minister must look towards erratic taxation and unjustified tax concessions granted to elites.
The majority of the measures announced in the Finance Act, 2024, as passed by the Parliament, amount to over-taxing an economy that is deep in recession, while huge tax benefits to vested interests continue.
The incidence of taxation has also shifted to the salaried class that is already feeling the real brunt of hyperinflation. “This is a tragedy with no parallel in malevolence.”
There is nothing in the Finance Act, 2024, to raise revenues by lowering tax rates and broadening the base to tap the actual tax potential of Rs32 trillion, Dr Haq added.
Another tax expert said the shortfall in 2023-24 would automatically result in an upward adjustment of the target in 2024-25. However, the incidences of corruption in the field formations in refund payments have not been decreased reflecting a lack of enforcement and monitoring by the FBR IR Operations Wing.
The government has enforced new taxation measures of Rs1.761 trillion, taken through Finance Act 2024, from July 1, 2024, including increased tax burden on the salaried class and heavy indirect taxation on the general public including the imposition of sales tax on stationery items, dairy products and poultry feed.
At the same time, the FBR failed to prevent incidences of refunds like one that happened in Lahore. The FBR has been forced to suspend senior IR officials of Lahore due to issues in refunds. The matter is under investigation by the FIA, the tax expert added.
Copyright Business Recorder, 2024