The shortfall in tax receipts widened to a whopping Rs 400 billion as Federal Board of Revenue (FBR) could collect only Rs5.62 trillion in the first ten months of current fiscal year despite announcement of a mini-budget and steep currency devaluation that boosted revenues. According to Provisional results, the FBR missed July-April revenue collection target of Rs6.02 trillion with a wide margin of over Rs400 billion.
It should be a matter of grave concern for government particularly at a time of thirty six percent inflation and due to sinking value of the rupee, which is boosting tax collection at import stage. Experts believe the tax shortfall is so huge that it cannot be bridged in remaining two months of current fiscal year. At this pace of tax collection, it is also being anticipated that the FBR will also end up missing the annual target of Rs7.640 trillion. The shortfall will result in more borrowing, which in turn will squeeze government’s budget space due to higher interest costs. Already the country is faced with a tough economic shortfall and this failure on tax collection side will only further add to the worries. Instead of pursuing easy course of burdening those already paying their taxes honestly, the government must come up with a robust plan to bring potential sectors especially retailers and big agriculturalists into the tax net. These sectors will definitely resist this move as has been seen in the past yet government will have to act decisively without bowing to their opposition if it is really interested to take the economy in right direction.
