ISLAMABAD, March 17: Pakistan’s tax machinery and International Monetary Fund are divided over the revenue realisation from the new taxation measures for bridging the shortfall to reach a conservative total by end June 2011, a senior tax official told Dawn.

The IMF has informed the tax officials that as a result of the new taxation measures taken recently the total revenue collection would barely reach conservative Rs1,580 billion by end June next.

But, according to the tax official, FBR has estimated that revenue collection could reach easily now to Rs1,604 billion, which was a revised target to begin with by end June 2011 but later on revised downward following shortfall witnessed in the past few months.

The IMF has projected the base revenue collection at Rs1,510 billion for the current fiscal year. This does not include the new revenue measures impact, which according to the Fund’s estimation arrives at Rs70 billion.

On the other hand, FBR estimated base revenue collection at Rs1,520 billion. However, they calculated that the new taxations would yield an additional revenue of Rs85 billion by end June 2011.

As per FBR estimations, an amount of Rs25 billion would be raised from 15 per cent one time surcharge on income tax payable during the tax year 2011, and another Rs25 billion would come to the government’s kitty from withdrawal of exemptions of sales tax from fertilizer, pesticides and input tax on agriculture tractors and raising of special excise duty to 2.5 per cent.

At the same time the withdrawal of facility of zero-rating on plant, machinery and equipments would also yield additional revenue for the kitty. These goods will now be liable for sales tax at the rate of 17 per cent.

It has been proposed that imposition of 15 per cent sales tax on domestic supplies of five major export-oriented sectors and other administrative measures would help the tax officials to pocket around Rs15 billion for the kitty.

Similarly, the charging of sales tax at the rate of 8 per cent on the actual price of sugar will yield an additional revenue of Rs4 billion by end June 2011.

These revenue measures would drag the inflation which was already in the double digit. The increase in special excise duty at import stage will also be passed on to the end consumers besides slapping the standard rate of 17 per cent on agriculture machinery and other implements.

Consequently, FBR mostly relies on growth in economy, especially rising inflation and import volume, the easiest way to pocket few billions for achieving the target. These factors explain the increase in revenue collection in FBR’s latest figures.The most worrying factor for the government will be that customs duty has witnessed a negative growth since February following the massive growth recorded in the previous months. “This is the imminent fall out of the massive reshuffle of all most all collectors and other senior officers of the tax machinery in the mid-fiscal year”, a senior tax official commented.

In the current fiscal year, the income tax collection largely remained short of the target followed by the federal excise duty. The only taxes that posted growth were the customs duty and general sales tax collection.