ISLAMABAD – The Federal Board of Revenue (FBR) has faced tax collection shortfall of Rs47 billion during first four months (July-October) of the current financial year.
The FBR has provisionally collected Rs1,024 billion during July-October period of the year 2017-18 as against the target of Rs1,071 billion, said an official of the FBR. He further said that tax collection would enhance in the days to come. Meanwhile, the FBR has collected Rs259 billion during October. The federal government had set the revenue target of Rs4,013 billion for fiscal year 2017-18. The FBR would require collecting Rs650 billion additional revenue to achieve ambitious target of Rs4,013 billion in the current fiscal year. Around 19 percent growth would be required in the current fiscal year over provisional collection of Rs3,362.1 billion in the just concluded fiscal year.
The federal government had restricted the budget deficit at Rs324 billion during first quarter (July-September) of the current fiscal year as against Rs438 billion in the same period of the last year due to robust tax collections and lower expenditure. In terms of GDP, the overall deficit decreased to 0.9 percent in the first quarter of current financial year as compared to 1.3 percent recorded in the first quarter of last year.
The government has recently decided to repay the tax refunds to the exporters amid healthy collection in tax collection. The FBR on Tuesday has asked State Bank of Pakistan (SBP) for payment of Rs12.5 billion refund against 3,261 RPOs issued up to August 31, 2017, through direct electronic credit to the claimants’ account. The amount shall be so credited within 24 hours.
It may be recalled that in a meeting with the chairman and senior officials of FBR in Finance Division on October 26, Finance Minister Ishaq Dar had issued directives for payment of sales tax refunds by October 31, 2017, against RPOs issued up to August 31, 2017. The directives were aimed at facilitating the business and resolving the liquidity problem faced by refund claimants particularly exporters. So, in line with the minister’s instructions, needful has been done.
It is added that the government has been able to contain the problem of refund pendency despite the increase in taxpayer population and increase in tax payments. FBR has been trying to facilitate the businessmen so that they are encouraged to pay their taxes. These refunds are being paid to all segments and sectors of registered persons including exporters, textile, etc. With the aforesaid payment, FBR has paid sales tax refunds amounting to Rs40 billion during the first four months of the current financial year, which is unprecedented. This step will substantially reduce the pendency of sales tax refunds.