ISLAMABAD: Despite imposing a huge tax of Rs 1.8 trillion, the government failed to achieve the tax target during the first two months of the current fiscal year, with tax collections falling short of the target by Rs 111 billion.
The failure to achieve the tax target has put a question mark on the ongoing $7 billion loan deal from the IMF, on the other hand, it has also increased the chances of the government bringing in a mini-budget. Accordingly, FBR was given a target of collecting 1.554 thousand billion rupees in taxes in July and August, but FBR could only collect 1.441 thousand billion rupees.
Thus FBR’s tax collection increased by 26%, but to achieve its annual target, FBR has to increase tax collection by 40%, thus FBR is facing a deficit of 14%. These figures are subject to the final results of the banks, if the final results are released by the banks, the tax collections may increase by 5 to 10 billion.
Government sources say that the annual target of tax collections in the budget was set at 12.970 thousand billion rupees, to achieve which there is a fear of bringing a mini-budget, because the IMF has set the target of tax collections to issue a new loan program. With strict compliance requirements imposed, the FBR has failed to meet the target for sales tax, federal excise duty and customs duties and has only been able to achieve the target for income tax collections.
It is to be noted that the FBR successfully achieved its targets in July, but failed to achieve the targets in August, and a target deficit of 115 billion was noted, as per the agreement between the IMF and the government if the government would cut taxes. Additional measures will be taken if targets are not met.
The mini-budget will impose more taxes on fertilisers, imports, income of professionals and contractors. The government has already failed to secure external financing, while the target of tax collections has not been met, creating more headaches for the government. , this shortfall is likely to increase further in September.
