Pakistan and the visiting IMF review mission have agreed on downward revision of FBR’s tax collection target.
According to a report, the said target has been reduced by Rs. 233 billion to bring it to Rs. 5,270 billion against the envisaged target of Rs. 5,503 billion for 2019-20.
The report stated that against the demand of Rs. 300 billion in annual target from the FBR side, the IMF review mission pitched its projection at Rs. 5,270 billion from Rs. 5,503 billion on the basis of their assumption that the import compression will continue haunting the FBR’s collection in months ahead of the current fiscal year.
“We had also requested to slash the FBR’s collection target as the country’s 50 percent revenues is collected at import stage,” said the report quoting the official sources.
When asked further, the FBR official said, the collection of customs at import stage increased to 17 or 18 percent while other taxes such as Income Tax in the shape of withholding tax and General Sales Tax (GST) at import stage contributed to 30 to 32 percent. In totality, the overall collection at the import stage went up from 40 to 50 percent.
The FBR high-ups argued that Pakistani side did not press upon any request for further slashing the FBR’s revenue target as the picture about the ability of collection would become clearer after December 2019.
So far, the FBR is facing a revenue shortfall of Rs. 163 billion in the first four months (July-Oct) period of the current fiscal year as the revenue collection body fetched Rs. 1,283.5 billion against the desired target of Rs. 1,447 billion.
The government requested the visiting IMF mission to reconsider the FBR’s annual target, which was set on the basis of five-point formula including GDP growth rate, CPI-based inflation, exchange and discount rates and import figures.