Rev­enue col­lec­tion

The Pak Banker - - FRONT PAGE -

Once again rev­enue col­lec­tion has fallen short of the tar­get. Ac­cord­ing to the lat­est re­port, the Fed­eral Board of Rev­enue has missed its first quar­ter tar­get by a wide mar­gin and could col­lect only Rs836 bil­lion in taxes, un­der­scor­ing the need for a com­plete but ur­gent re­vamp of the tax ma­chin­ery.In ad­di­tion to dis­ap­point­ing col­lec­tion re­sults, in­come tax re­turn fil­ing also fell short of ex­pec­ta­tions.Till the statu­tory dead­line of Septem­ber 30, less than 350,000 in­di­vid­u­als and en­ti­ties sub­mit­ted in­come tax re­turns for the tax year 2018. This forced the­new PTI govern­ment to an­nounce two months ex­ten­sion in fil­ing of the tax re­turns.

The July-Septem­ber tax col­lec­tion re­sults showed that the PTI govern­ment has to move swiftly to ad­dress struc­tural and ad­min­is­tra­tive is­sues be­ing faced by the tax ma­chin­ery.Dur­ing the first quar­ter of the cur­rent fi­nan­cial year, the FBR recorded a pro­vi­sional net rev­enue col­lec­tion of over Rs836 bil­lion as against Rs766 bil­lion col­lected dur­ing the same pe­riod of the pre­vi­ous fis­cal year.The Rs70 bil­lion in­crease in col­lec­tion was merely 9.2% higher and was not suf­fi­cient to achieve this first quar­ter's orig­i­nal tax col­lec­tion tar­get of Rs892 bil­lion. The FBR fell short of first quar­ter tar­get by Rs56 bil­lion. At the start of the fis­cal year, the FBR had set Rs892 bil­lion rev­enue col­lec­tion tar­get for July-Septem­ber quar­ter of this fis­cal year on the ba­sis of Rs4.435 tril­lion an­nual tar­get. Against this tar­get, the short­fall is Rs56 bil­lion.

The PTI govern­ment has pre­sented a mini-bud­get in par­lia­ment and low­ered its an­nual tar­get by Rs37 bil­lion to Rs4.398 tril­lion. On the pro­rate ba­sis, the first quar­ter tar­get has been low­ered by only Rs10 bil­lion due to re­vi­sion in the tar­get.The FBR's hand­out showed Rs41 bil­lion cut only in the first quar­ter tar­get - which is even Rs4 bil­lion higher than the re­duc­tion pro­posed in the an­nual tar­get. Be­sides usual sys­temic in­ef­fi­cien­cies, the in­ter­nal rifts be­tween the two wings of the FBR - the In­land Rev­enues Pol­icy and In­land Rev­enues Op­er­a­tions - also con­trib­uted to mas­sive short­fall in tax col­lec­tion and in­come tax re­turn fil­ing, said sources in the FBR.The IR pol­icy wing is­sued with­hold­ing taxes cir­cu­lar on Septem­ber 12 - two-and­half months af­ter the an­nounce­ment of the new bud­get for fis­cal year 2018-19.That dented the rev­enue col­lec­tion due to am­bi­gu­ity over changes in the rates made in the bud­get for FY2018-19.

Till to­day, the cor­po­rate in­come tax re­turn has not been fi­nalised by the FBR pol­icy wing, which also af­fected the com­pa­nies whose tax year ends on June 30.The FBR has not yet is­sued a notification to give new pow­ers to the In­tel­li­gence & In­ves­ti­ga­tion (I&I) wing af­ter changes brought in the bud­get.The FBR claimed the Rs70 bil­lion in­crease in the tax col­lec­tion in the first quar­ter was com­mend­able. It added the in­crease was regis­tered de­spite the fact that re­lief mea­sures, in­tro­duced through the Fi­nance Act, 2018, have ad­versely af­fected the rev­enue col­lec­tion in the first quar­ter.The FBR has es­ti­mated Rs35 bil­lion ad­verse im­pact on its rev­enues dur­ing the first quar­ter due the re­lief mea­sures in­tro­duced by the last PML-N govern­ment.

The Rs70 bil­lion in­crease in col­lec­tion was only 9.2% higher than the cor­re­spond­ing pe­riod and far lower than the re­quired 14.5% rates to achieve the down­ward re­vise tar­get of Rs4.398 tril­lion.The pro­vi­sional col­lec­tion for the month of Septem­ber 2018 stands at Rs323 bil­lion - which was merely Rs2 bil­lion or 0.6% higher than the Septem­ber last year.But the FBR claimed that the fig­ures of col­lec­tion re­ceived in the trea­suries of the re­mote ar­eas may fur­ther swell the rev­enue col­lec­tion for Septem­ber. In any case, the rev­enue col­lec­tion trend dur­ing the first quar­ter of the fi­nan­cial year au­gurs well for the ef­forts of the FBR to­wards achiev­ing the as­signed re­vised an­nual rev­enue tar­get of Rs4.398 tril­lion.

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