FBR-surpasses-net-revenue-target-by-Rs233bn-The-Correspondent

The Federal Board of Revenue has manipulated tax collection figures for the month of March to show less revenue shortfall, bringing in question its performance that otherwise was largely dependent on higher imports.

The FBR also could not deliver on the previous government’s single largest initiative to integrate the 500,000 retail machines with the tax system and collect additional Rs50 billion in revenue. Till March, it could integrate less than 4,500 businesses that paid additional revenue of about Rs2.5 billion.

FBR registered less than 3,900 retailers who integrated about 8,600 machines with the FBR system during the current fiscal year.

On March 31, the FBR issued a press release and claimed that it provisionally collected Rs575 billion in revenue, lifting the total collection to Rs4.382 trillion. However, it was reported that the actual taxes that were deposited in the kitty amounted to Rs561 billion, and the figure could marginally improve on the back of book adjustments.

The reconciled figures showed that the tax collection in March remained Rs35 billion short of the monthly target and was still Rs6 billion less than what the FBR had claimed in its press release over two weeks ago.

It was the first time that the reconciled tax collection remained less than the provisionally released figures, giving credence to the reports that the FBR deliberately fudged the figures.

The international financial institutions take strong exception to figure fudging, which also erodes policy makers, stakeholders and the government’s trust in the taxmen.

The FBR has not yet issued a statement to the media about the actual tax collection. It is not clear whether the FBR will present the manipulated or actual tax collection figures to Prime Minister Shehbaz Sharif next week. The premier had directed the FBR to give a presentation on its performance with a focus on measures to end harassment of taxpayers.

The taxpayers have been making hue and cry against undue tax demand notices that the FBR is sending to them without following the due process. As a result, the tax amount stuck up in litigation has suddenly doubled to Rs3.6 trillion.

For the current fiscal year, the last government had set tax target at Rs5.829, which was increased to Rs6.1 trillion in January this year after the Rs360 billion mini budget was introduced. The FBR now needs to collect Rs575 billion per month to hit the benchmark.

The insiders said that the trend of the first half of the month suggested that achieving this month’s target of Rs485 billion was also difficult. The Inland Revenue Service, which is required to collect Rs5.2 trillion out of the revised annual target, had attempted to pass its partial burden to the Customs. But the Customs authorities refused to accept the proposed Rs970 billion target while sticking to its Rs917 billion target, said the sources.

The FBR’s tax collection is largely driven by imports that contributed 52% in total collection. During the first nine months of the fiscal year, the sales tax collection at the domestic stage decreased by 8.9% despite double-digit inflation in the country, which speaks about inefficiency of the tax machinery.

POS: Former finance minister Shaukat Tarin had announced in June last year that he would plug in 500,000 point of sales (POS) machines and fetch additional Rs50 billion in the current fiscal year. The FBR had secured punitive powers to seal those business premises that would not integrate with the tax system.

However, the data showed that the FBR could integrate hardly 4,500 more businesses that installed about 10,000 more machines, suggesting the Pakistan Tehreek-e-Insaf’s government’s biggest initiative failed due to poor performance of the FBR. The collection from these retailers amounted to Rs16 billion -up by only Rs2.5 billion in nine months. This shows that the FBR will, in no way, be near the additional collection goal of Rs50 billion.

The story was filed by the News Desk. The Desk can be reached at info@thecorrespondent.com.pk.

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