FBR collection falls short by Rs65bn
ISLAMABAD: The Federal Board of Revenue witnessed a shortfall of around Rs65 billion in the first seven months of this fiscal year as against the projected target due to a slowdown in economic growth and poor tax compliance.
The revenue collected fell to Rs1,020 billion in seven months ended Jan 31, as against the proposed target of Rs1,085bn, showing a decline of six per cent.
FBR had already revised downward the collection target to Rs2,231bn for 2012-13 from earlier projected budgetary target of Rs2,381bn. Despite this downward revision, the FBR is still facing a huge shortfall because of drastic reduction in collection in income tax and sales tax.
This means that tax officials will have to collect Rs1,211bn in the next five months (February-June) to reach closer to the revised target.
If political situation remains unstable during the caretaker setup and post-election period, the revenue collection is expected to deteriorate even further in the second half of the fiscal year, which could widened the budget deficit to an un-manageable level.
All federal taxes lag behind from their respective targets for the current fiscal year excluding collection from customs duties.
With the shortfall in revenue collection, the tax-to-GDP ratio is now estimated at 9.4 per cent for 2012-13 from earlier projected 10pc. Last year, the tax to GDP ratio was 9.1pc.
As the government is believed to drop the tax amnesty bill because of refusal by its two coalition partners to support it, the FBR has evolved “plan B” to issue notices to the identified people who did not file tax returns.
“We have given target to all regional tax offices to issue notices to non-filers”, the official said.
As many as 2.499 million taxpayers did not file their returns for the tax year 2012. The minimum penalty for not filing returns/statements starts from Rs5,000 and can be as high as 25pc of the tax payable in a year. The non-filer would either declare his/her total income for assessment of tax in a year or tax officials would declare it ex parte.
Tax officials, however, still believe that the tax amnesty schemes will be introduced through a presidential ordinance in March.
This scheme will only give an opportunity to 3.8 million identified by the Nadra as potential taxpayers but did not file tax returns.
Similarly, the FBR has worked out administrative and revenue measures which are expected to yield an additional Rs60 to Rs70bn for the exchequer. These measures are expected to be announced soon, the official added.The FBR has also sought amendments to Alternate Dispute Resolution Laws to make resolution mode of tax disputes the first choice of taxpayers. It has been estimated that almost Rs256 billion have been stuck in court cases for the past many years.