Revenue shortfall surges by Rs200bn in MarchArchive
ISLAMABAD: The Federal Board of Revenue (FBR) on Tuesday announced a revenue loss of over Rs200 billion for March owing to the coronavirus-led slowdown in economic activity while warning of further losses in the coming months in case businesses fail to resume operations.
Provisional figures showed the FBR collected Rs325bn in March against the projected target of Rs525bn, showing a shortfall of around 38 per cent or Rs200bn.
On a year-on-year basis, collections during March fell by around 12pc or Rs45bn against Rs370bn raise during the same month last fiscal year.
Owing to the massive fall in collections during the month under review, the government is unlikely to achieve its revised full-year revenue target by end of this fiscal year.
Cumulatively, the FBR missed tax revenue targets by a whopping Rs470bn during July-March as total collections during the period reached to Rs3.050 trillion against the revised target of 3.520tr.
The figures, however, show a growth of 12.9pc or Rs349bn compared to corresponding period last year.
The International Monetary Fund (IMF) had already lowered revenue collection targets to Rs5.270tr from the budgetary projection of Rs5.503tr.
Nine-month tax collection gap widens to Rs470bn
In its last meeting with the fund officials, the FBR estimated revenue collection by June to reach around Rs4.7tr much below the revised target.
The economic slowdown in the wake of coronavirus pandemic and governance issues within the FBR have further dampened the chances for the government to achieve its targets.
An official source at the FBR told Dawn that the IMF is going to announce a major cut in tax collection targets on April 10. “We have an understanding that the fund will take into account all prevailing conditions to lower the target for the current fiscal year”, he added.
FBR chairman Shabbar Zaidi is on indefinite leave. In his place, the country’s apex revenue body is currently being run by Member Administration Nausheen Amjad.
Tax-wise break up for the first nine months showed duty and taxes collection at import stage — sales tax, federal excise duty (FED), withholding tax and customs duty dipped by 4.2pc over the corresponding months of last year. The fall in revenue collection was led by a 5.9pc reduction in withholding tax collection, 15.2pc in FED and 7.2pc in customs. However, sales tax collection at the import stage posted a growth of 16.8pc.
In addition, collection of domestic taxes — income, sales and withholding taxes posted 20.9pc growth during the period under review.
The customs collection fell by Rs36.387bn (or 7.2pc) to Rs471.305bn in July-March compared to Rs507.692bn in the last year. The decline was mainly attributable to falling imports, misdeclaration of goods, corruption and under-invoicing.
The income tax collection clocked in at Rs1.139tr versus Rs0.985tr over the same period last year, showing a growth of Rs153.697bn or 15.6pc.
During the first nine months, sales tax collection on goods reached Rs1.250tr as compared to Rs1.044tr last year, showing a growth of Rs206.120bn or 19.7pc. The FED collection reached Rs187.547bn.
It is worth mentioning that the FBR failed to achieve all of its respective projected targets for the first nine months of current fiscal year.
Meanwhile, the FBR has issued a statement wherein it has appealed to taxpayers to pay their taxes in time to increase government’s revenue resource.
It further said FBR staff is performing its duties diligently during lockdown as they are determined to collect revenues for government in such difficult times.
However, it said the responsibility also lies with taxpayers to pay their taxes in time as the collections will be used by government to contain the pandemic and spend on people who desperately need help at this critical time.
Published in Dawn, April 1st, 2020