Revision in fiscal year 2014 revenue target: no direction from MoF yet: FBR March 09, 2014 SOHAIL SARFRAZ0 CommentsE-mailPrintPDF The Federal Board of Revenue has not yet received any official direction from the Ministry of Finance to revise the revenue collection target from Rs 2,475 billion to Rs 2,345 billion for 2013-14. An FBR official claimed that the Board is still chasing the revenue collection target of Rs 2,475 billion for 2013-14. The revenue collection has shown an increase of 17 percent during July-Feb 2013-14 against the corresponding period of 2012-13. However, the FBR official admitted that it is difficult to achieve the target in view of current pace of collection. But officially the annual target for 2013-14 is still Rs 2,475 billion unless a downward revision is officially communicated by the Finance Ministry, he added. The FBR receipts were estimated as Rs 2,475 billion for the current year, which are based on revised projected receipts of Rs 2,050 billion for last fiscal year. The FBR collected Rs 1,946 billion in the last fiscal year instead of the target of Rs 2,050 billion so the base effect resulted in a shortfall. The target for 2012-13 was fixed on the basis of Rs 1,952 billion to be collected by end of June 2012-13 but actually the collection for the year 2012-13 ended up at Rs 1,883 billion. Thus, the base was eroded by Rs 69 billion right from the beginning of 2012-13. There were a number of other internal factors which further contributed to the shortfall: (i) the FBR had to bear deficit of Rs 34 billion due to shifting of sales tax on services from FBR to Punjab Revenue Authority (PRA), which was integral part of FBR target of Rs 2,381 billion; (ii) the reduction in rate of sales tax from Rs 7 to Rs 4 per unit of electricity in cases of steel melters and re-rolling units resulted in the decline of collection of sales tax; and (iii) suspension of section 153A of the Income Tax Ordinance 2001, introduced through Finance Act 2012 which was a major documentation measure having revenue impact of approximately Rs 15 billion. The reduction in rate of FED on sugar from 8 percent to 0.5 percent on quantity cleared locally equal to exported sugar caused lower collection of FED. The reduction in sales tax rates on some items (e.g. steel and plastic) from 22 percent and 19.5 percent to 16 percent in budget 2012-13 also negative impacted on collections. Moreover, the reduction in the rate of income tax on salary income, lack of enforcement measures by the field formations and stalled audit activities throughout the year due to court interventions and in expectation of having windfall through amnesty scheme all contributed to lower revenue collections.
Posted on: Sun, 09 Mar 2014 03:29:35 +0000
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