Rev­enue Col­lec­tion

Enterprise - - Contents - By Huza­ima Bukhari and Dr Ikra­mul Haq

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,

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