Finance Minister Ishaq Dar stressed the importance of intensifying efforts to tap into the nation’s “true tax potential” and offered full backing to the tax collection authority in executing its duties.
Dar highlighted the need to boost tax revenues in a Tuesday meeting chaired by the minister to review the Federal Board of Revenue’s (FBR) revenue collection performance. The meeting was attended by Special Assistant to the Prime Minister (SAPM) on Finance Tariq Bajwa, SAPM on Revenue Tariq Mehmood Pasha, FBR Chairman Asim Ahmad, and senior officials from the Finance Division and FBR.
FBR Chairman presented the revenue targets and performance from July 2022 to March 2023, expressing his determination to make the utmost effort to meet the remaining revenue objectives for the last quarter of the fiscal year 2022-23.
The Express Tribune reported that the FBR faced a tax revenue shortfall of Rs276 billion during the first nine months of the current fiscal year (July to March).
Despite introducing a mini-budget, the deficit significantly widened in March, potentially prompting the International Monetary Fund (IMF) to request further spending cuts or the imposition of more taxes.
FBR officials stated that the bureau provisionally collected around Rs5.16 trillion from July to March of fiscal year 23, against a target of Rs5.433 trillion. However, tax revenues fell short by Rs276 billion of the target, even after the government implemented a mini-budget in mid-February, raising the standard general sales tax (GST) rate to 18% and increasing the rate on dozens of items to 25%.
In March, the FBR collected only Rs663 billion compared to the monthly target of Rs727 billion, resulting in a shortfall of Rs64 billion.
Almost all of the bureau’s field formations missed their respective targets in March, with tax collection only increasing by 16% for the month.
