Quantcast
Saturday , August 19 2017
Breaking News
Home / Islamabad / FBR collects Rs465b in Q1, misses target by Rs27b
FBR collects Rs465b in Q1, misses target by Rs27b

FBR collects Rs465b in Q1, misses target by Rs27b

ISLAMABAD: Amid allegations of blocking taxpayer refunds to paint a rosy picture of revenues, the federal tax authorities have collected Rs465 billion in taxes in the first quarter of the current fiscal year, missing the target by Rs27 billion which can disturb quarterly budgetary ceilings agreed with the International Monetary Fund (IMF).

As efforts were under way to make maximum collection even after closing of working hours, the Federal Board of Revenue (FBR) received taxes worth Rs465.4 billion until Monday evening, according to provisional figures. Taxes are expected to increase by at least Rs5 billion after figures are finalised, say FBR officials.

To achieve this year’s target of Rs2.475 trillion – something that FBR Chairman Tariq Bajwa recently called “very challenging” – the FBR was targeting Rs492 billion in the first quarter (July-September).

In the first two months, it claimed that taxpayers deposited Rs280 billion, but the reconciled figures, provided by the State Bank of Pakistan to the Ministry of Finance, put tax payments at Rs275 billion.

With the base of Rs280 billion, the FBR had hoped that it would receive taxes worth Rs212 billion in September. However, it got Rs185 billion, according to the officials.

Despite the shortfall, the taxes were Rs29 billion higher from Rs436 billion projected by the IMF. For the whole fiscal year, the IMF believes Pakistan will not be able to collect more than Rs2.345 trillion.

Against IMF’s estimate of Rs166 billion income tax collection excluding refunds in the first quarter, the FBR’s gross collection stood at Rs159 billion with refunds yet to be paid. The lender put net sales tax collection at Rs189 billion, but the FBR’s gross collection stood at Rs242 billion including refunds.

Under the head of federal excise duties, the IMF saw the FBR receiving Rs28 billion, but actual gross collection stood at Rs30 billion. Moreover, the IMF forecast that customs duties would yield Rs53 billion, the same amount the FBR had so far received but refunds were yet to be paid.

The comparison between IMF projections and actual collections suggests that sales tax collection is far higher than the IMF estimate, which is also a major area that generates heavy refunds, supporting the perception that the FBR was delaying the release of refunds.

“I cannot say that we will achieve the quarterly target but we are trying our best,” FBR Chairman Tariq Bajwa said while talking to the media. One of the reasons behind lower collection was that imports were shrinking and all types of taxes at the import stage were not coming according to expectations, he added.

To a question, Bajwa denied that the FBR was blocking refunds, but said it was clearing only those claims that had been filed in the new financial year. It would be up to the government to decide whether it wanted to clear the backlog of refund claims from previous years, he clarified.

He stressed that tax authorities were devising a mechanism to make the tax refund process transparent. Until the finalisation of the mechanism, the FBR was using refund payments in the previous comparative period as a benchmark.

Under the $6.7 billion IMF Extended Fund Facility, Pakistan has agreed to restrict its budget deficit to 5.8% of gross domestic product (GDP) in fiscal year 2013-14. In the first quarter, the country can post a deficit of Rs418 billion or 1.7% of GDP.

In the first two months, the deficit remained at 0.8% or Rs208 billion as the government utilised Rs67 billion worth of telecom funds.