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FBR fails to meet revenue targets

FBR achieves record revenue collection of Rs.5.15 trillion

ISLAMABAD, MAR 8 /DNA/ – The Federal Board of Revenue (FBR) has reported a failure to meet its revenue collection objectives for the second month in succession, sparking discussions regarding the government’s inclination towards emergency fiscal policies. This 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 1% 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). Data indicates that the FBR’s revenue collection lagged by 1.3% and 4.6% for January and February 2024, respectively.

Confidential sources have revealed that February witnessed a revenue collection of Rs 681 billion, falling short of the Rs 714 billion target by Rs 33 billion. January’s revenue also did not meet expectations, with a shortfall of Rs 9 billion, totaling a Rs 42 billion deficit over these two months. This financial gap has been linked to opposition within the FBR against the Finance Minister’s initiatives for reforming and streamlining the tax collection process.

Reports suggest that this opposition has escalated to the extent of strike threats by the FBR’s senior management, significantly compromising the integrity and functionality of the institution. Rumors within the FBR suggest an anticipation of improved revenue metrics with the induction of a new Finance Minister, indicating 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.

This turmoil reflects underlying issues, potentially leading to the implementation of a mini-budget in accordance with IMF stipulations. However, such measures may inadvertently result in increased financial burdens on the populace.

In response to the revenue shortfall, the government has delineated eight emergency measures intended to enhance monthly revenue by Rs 18 billion for the fiscal year 2023-24. These measures include modifications in the sales tax rates for specific industries, the 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.

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