FBR needs to collect mammoth Rs2,759b in second half to achieve annual target

ISLAMABAD- The Federal Board of Revenue (FBR) would have to collect mammoth Rs2,759 billion in second half (January to June) to achieve the annual tax collection target for the current fiscal year.

The government had set annual tax collection target at Rs4963 billion for the ongoing financial year. However, the government is struggling to achieve the target as it had already faced shortfall of Rs6 billion in tax collection in first half of the year 2020-21. The FBR had collected net revenue of Rs2204 billion in July to December period, which is 99.7% of its six-monthly target of Rs.2210. Tax collection had shown only 5 percent growth over Rs. 2101 billion which was collected during the same period last year. Initially, the government needs 24.4 percent growth to achieve the annual tax collection.

The government would now have to collect Rs2759 billion in next six months to meet the annual tax collection target. Economic experts are of the view that government might struggle to achieve the annual tax collection without additional revenue generation measures. They are of the view that there will be two options either to slash down the target or take additional measures to meet the annual target.

“The government has not decided yet to introduce mini budget for revenue generation measures,” said an official of the FBR while talking to The Nation. He said, “Government’s tax collection is on track in first six months as we had achieved 99.7 percent of the target.” Higher growth in revenue collection in the second half especially March onwards is expected, which will help in meeting the annual target,” he added. Official said that economic activities are accelerating in the country, which would result in increasing taxes. 

It is worth mentioning here that the government had set ambitious revenue collection target of Rs 2,210 billion for first half (July-Dec) of the current fiscal year. Annual tax collection target for the FBR is around Rs4.9 trillion. However, it had achieved Rs2204 billion in the said period, missing the target by Rs6 billion. The breakup of Rs2204 billion showed that Income Tax collection for July to December stood at Rs. 816 billion. Similarly, collection of Sales Tax, Federal Excise Duty, Customs Duty remained at Rs. 915 billion, Rs. 127 billion and Rs. 336 billion respectively. Moreover, an additional Rs.10 billion has been collected from book adjustment. It is expected that revenue to be collected from book adjustment will increase in coming days. For the month of December only, the total collected revenue stood at Rs. 508 billion, which was 97.7% of the target of Rs.520 billion and showed a growth of 8.3% against 469 billion collected in last December. There is an increase of Rs. 39 billion in the revenue collection of December 2019. This is the highest monthly growth during Jul-Dec period.

Meanwhile, Federal Board of Revenue has launched Electronic Filing of Appeals with effect from 1st January, 2021. 

Commissioner Inland Revenue (Appeals) is the first tier of appellate hierarchy provided in the Inland Revenue laws. Taxpayers aggrieved with the orders of Inland Revenue tax authorities file first appeal before the Commissioner (Appeals). Providing facility of filing of appeals electronically by the taxpayer is another step toward automaton of FBR.

In compliance with the vision of the Prime Minister, FBR has collaborated with Pakistan Revenue Automation Limited for development of software for e-filing of appeals. In the process the input of major stakeholders such as ICAP, ICAMP and PTBA was also taken. The system will enable the taxpayers aggrieved by the orders of tax authorities to e-file appeals on the Iris Web Portal. Both the revenue and the taxpayers will reap the benefits of the automated system for e-filing of appeals.