ISLAMABAD - The massive taxation introduced in budget has helped the Federal Board of Revenue (FBR) in surpassing the revenue collection target in July 2014 by one billion rupees despite country observed prolong Eid holidays that reduced the tax accumulation last month.
“The Federal Board of Revenue has collected Rs 138 billion during the month of July 2014”, said Acting Chairman of FBR Shahid Hussain Asad while talking to The Nation on Saturday. The target for the previous month was Rs 137 billion; therefore FBR has surpassed the target by one billion rupees by collecting Rs 138 billon in July 2014.
The incumbent government in the budget 2014-2015 had introduced massive revenue collection measures worth of Rs 231 billion, which stated yielding result in terms of tax generation. The tax department has exceeded the revenue collection target during the month of July 2014.
Sources informed that revenue collection could further enhance if country did not observe long Eid holidays that halted the economic activities. “The Federal Board of Revenue (FBR) has face revenue loss of Rs 42 billion during six holiday at the eve of Eid-ul-Fitr”, said an official of the FBR while talking to The Nation. He said that FBR collected seven billion rupees everyday; therefore, six consecutive holidays would cost Rs 42 billion in terms of tax collection, he added.
Sources in FBR informed that aforesaid revenue shortfall could hit the government’s efforts to reach the ambitious tax collection target of Rs 2.81 trillion, which seems challenging at the time when FBR has already missed target in previous year. The FBR had fixed its target at Rs 2475 billion in last fiscal year, which was revised downward to Rs 2345 billion and again to Rs 2275 billion. However, the tax department even failed to achieve its revised target by the end of June 2014 despite taking additional taxation measures. The FBR collected Rs 2266 billion during previous fiscal year 2013-2014 against the twice-revised tax collection target of Rs 2275 billion, leaving shortfall at Rs 9 billion. Even this Rs 2.266 trillion figure is yet to be reconciled by government agencies, say sources in the Ministry of Finance. Therefore, after failing in achieving the previous year’s target, the government had imposed new taxation measures worth of Rs 231 billion in the budget. The government had imposed new taxes worth of Rs 128 billion and eliminated tax exemptions worth of Rs 103 billion.
The annual collection of Rs 2.810 trillion is very critical to remain within the budget deficit target of 4.8 percent of the GDP (gross domestic product) or Rs 1.390 trillion, as agreed with the International Monetary Fund. According to the Memorandum of Economic and Financial Policies (MEFP) agreed with IMF, the government would further eliminate the tax exemptions worth of Rs 81 billion in the last quarter (April-June) of the ongoing financial year 2014-2015 if FBR failed to achieve its target during nine months (July-March) of FY2015. The SROs giving Rs 81 billion worth of tax and duty concessions, which are supposed to be withdrawn from fiscal year 2015-16, will be scrapped in the current fiscal year if the collection remains dismal in the first nine months.