Zubair Qureshi Islamabad
The Federal Board of Revenue (FBR) has not achieved its revenue collection objectives for the second month in succession, leading to speculation if the government would resort to emergency fiscal policies or still it would wait for some improvement on the FBR part.
The continual shortfall requires the generation of an additional Rs 18 billion each month for the fiscal year 2023-24 to address the revenue deficit effectively.
A deviation greater than 1pc from the set target might necessitate the introduction of a supplementary budget, a measure aligned with the prerequisites of an agreement with the International Monetary Fund (IMF).
The data available with Pakistan Observer indicates that the FBR’s revenue collection lagged by 1.3pc and 4.6pc for January and February 2024, respectively.
Moreover the sources have revealed that February 2024 witnessed a revenue collection of Rs681 billion, falling short of the Rs714 billion target by Rs 33 billion.
January’s revenue also did not meet expectations, with a shortfall of Rs 9 billion, totaling aRs 42 billion deficit over these two months.
An anticipation of improved revenue metrics with the induction of a new Finance Minister, indicates the present downturn as a deliberate tactic to establish authority and leverage favorable terms with the incoming fiscal policy leadership, thus resisting the proposed reforms.
In response to the revenue shortfall, the government has delineated eight emergency measures intended to enhance monthly revenue by Rs18 billion for the fiscal year 2023-24.
These measures include modifications in the sales tax rates for specific industries, imposition of a Federal Excise Duty (FED) on sugar, and incremental increases in various taxes.
These interventions have been strategically designed to bridge the revenue gap with minimal economic disruption.
The success and impact of these measures on the economy and public welfare remain under scrutiny as the FBR contemplates its subsequent strategies in navigating these fiscal challenges.
