Dreams of self-reliance
time and again it is time that the Public Accounts Committee orders forensic audit of FBR’s affairs to verify claims of “wonderful 16% growth” in tax collection during the last fiscal year. Even this figure of Rs 2254.5 billion includes not only blocked refunds of billions of rupees but also billions “received” as “advance not due” in order to show “higher collection”.
On April 23, 2014, the Chairman FBR admitted before the Senate’s Standing Committee on Finance that refunds of Rs 97 billion were due. The figure by the end of fiscal year must have been much higher. This was not the first time that FBR’s Chief made such a confession. Way back in 2005, the then Chairman admitted before Public Accounts Committee that refunds worth Rs 321 billion due to banks as on 30th June, 2005 were not paid. He also admitted that collection for the financial year 2004-05 was overstated to the extent of Rs 20 billion by securing advances.
This jugglery of figures on the part of Ministry of Finance (MoF) is a national disgrace. It amounts to abuse of the system at the highest credibility of the country.
It is an undeniable fact that in fiscal year 2013-14, the government registered huge shortfall in tax revenue generation and exceeded its sanctioned current expenditure at least by Rs 112 billion. Total current expenditure in the budget was showed at Rs 3242 billion. Original tax target of Rs 2475 billion was revised to Rs 2345 billion and finally to Rs 2275 billion. Even after blocking refunds and forcing big taxpayers to park advance of the next months, FBR could not achieve it, but strangely it claimed provisional collection at Rs 2266 billion. Even this is now proved with it was almost achieved.
The federal government’s total revenues (both tax and non-tax) in budget 2013-14 were projected at Rs 3420 billion out of which share of provinces was estimated at Rs 1502 billion-they have actually received Rs 1264 billion. The federal expenditure under debt servicing was Rs 1154 billion, defence affairs and services was Rs 627 billion and running of civil government was Rs 275 billion. The government after admitting further shortfall of Rs 11.5 billion in FBR’s tax collection cannot deny that total fiscal deficit for 2013-14 reached the mark of nearly Rs 2 trillion, meaning by, more borrowings, causing more provision under the head, debt servicing in the coming years. This is the vicious debt trap in which Ishaq Dar, like his predecessors, wants us to remain.
The burgeoning fiscal deficit is not an isolated phenomenon. It is related to lack of political will to undertake fundamental structural reforms, enforce fiscal discipline, tax the rich and mighty, crackdown on parallel economy by confiscating untaxed assets, abolish unprecedented perks and benefits to the ruling elites,