FBR missed collection target due to shortfall in six areas

ISLAMABAD: The Federal Board of Revenue (FBR) has missed the revenue collection by Rs 321.5 billion in 2018-19 due to shortfall in six areas.

According to the FBR year book (2018-19), during FY 2018-19, the FBR missed the target by around Rs 321.5 billion mainly for the following major reasons: petroleum Rs -96 billion; telecom due to suspension of Withholding Tax by Supreme Court, Rs -55 billion; reduced government spending, Rs -80 billion; import compression (Withholding at import stage) Rs -16 billion; reduced rates on salary income announced in the Budget 2018-19 Rs -50 billion; and reduction in Customs Duty on imports Rs -50 billion.

Although the FBR said that shortfall in revenue collection remained Rs 321.5 billion in 2018-19 due to shortfall in six areas, yet the total shortfall comes to Rs 347 billion of the aforementioned sectors and there is a difference of Rs 25.5 billion.

During FY 2018-19 the overall growth in net tax collection has been (-) 0.4%. The collection of FED grew by around 11.6% and customs by 12.7% during FY 2018-19, whereas the sales tax and direct taxes recorded a negative growth of 1.8% and 5.9% respectively.

As per the collection FY 2018-19 the sales tax is the top revenue generator with 38.1% share followed by direct taxes with 37.8%, customs 17.9% and FED 6.2% (Graph 1). During FY 2018-19 the share of customs duty and FED has increased, whereas the share of direct taxes and sales tax has decreased slightly.—SOHAIL SARFRAZ