October 1, 2019 (MLN): Chairman Federal Board of Revenue (FBR) Shabbar Zaidi, yesterday informed that the tax collection up to 90 percent of highly aggressive target for quarter ended September 30, 2019, has been achieved.
In a tweet yesterday he said, “domestic tax collection increased by 25 percent. The import contraction is around USD 3 billion. The effect of that is around 125 billion. This shows that target has been met”.
As per provisional numbers, the total collection is Rs960 billion excluding past year refunds of Rs15 billion, he further added.
However, according to the report by Ismail Iqbal Securities, FBR has missed a quarterly target of Rs. 1,071 billion, reflecting a shortfall of Rs. 111 billion. While recording a 15.3% YoY growth, tax collection remains short of IMF’s target and implies need for some expenditure trimming.
The report further apprised that based on the revised targets of Rs1071 billion, 1HFY20 tax target is now only 42.9% of the full year’s compared to a historical 47-48% collection.
Considering the above mentioned facts, the current collection suggests that the government is likely to fall short of its Rs 5,503 billion target by a margin of Rs 600-800 billion, the report added.
To recall, initial budgeted target assumed income taxes to be increased 25% YoY; however, based on actual collection for FY19, the revised target is looking at a 44% YoY growth. Similarly for indirect taxes (sales tax, FED and customs duty), actual FY19 collection fell short by Rs108 billion of last year’s revised target of Rs 2,491 billion. Revised targets are now aiming to increase sales tax by 50% YoY to Rs 2,203 billion; FED by 64% YoY to Rs 384 billion; and customs duty by 30% YoY to Rs 889 billion.
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