The Federal Board of Revenue (FBR) faces a massive revenue deficit of over Rs.440 billion since the start of the fiscal year. With only a 1% growth rate, the deficit is much more than the budgeted figures. Current collection by the board is Rs.3.33 trillion against the expected amount of Rs.3.75 trillion, creating a deficit of Rs.425 billion.
The unsatisfactory collection records were observed as the major heads including customs, income tax, sales tax and federal excise duty (FED) could not meet the specified targets. A senior board official claimed that the substandard performance is based on the fact that this year was a test run to identify and correct the loopholes in the system.
While the deficit is likely to touch Rs.500 billion, board officials blame various factors for the shortfall, including suspension of withholding tax on mobile cards, the tax incentive to salaried class and a sluggish economy. The deficit was also extended by decreased imports and an effective ban on the import of crude oil and vehicles.
Despite the latest announcement of amnesty scheme by the PM, total collection by the end of the fiscal year is expected below Rs.3.9 trillion. FBR has suffered a shortfall of Rs.88 million, just in May. The customs accumulation fell behind the objective of Rs.66.2 billion in May by acknowledging income of Rs.55.9 billion, creating a deficiency of Rs.10.3 billion.
As per the conditions of the IMF’s bailout package, the collection target set for the coming fiscal year is Rs.5.55 trillion. However, the tax authorities believe that desired outcomes are less likely to be attained.