Islamabad : In a major setback to Shahbaz government , The Federal Board of Revenue (FBR) has fallen short of its revenue collection target by Rs 386 billion for the first half of the current fiscal year. FBR ‘s released data shows it collected Rs 5623 billion against a target of Rs 60O9 billion for July -Dec 2024.
FBR attributes such a big short fall in tax collection in July-Dec last year to slow imports and more than expected reduction in inflation, which in its opinion, caused slow in tax receipts between July and December 2024.
This short fall of Rs 386 billion in the first six months of the current fiscal year is an alarming development for Pakistan’s economic managers as it will create problems for Islamabad in coming weeks and months. It can make difficult for Pakistan to convince International Monetary Fund (IMF) when it comes to decide the release of next tranche to Pakistan of already agreed bailout package.
IMF is already on its toes to check Pakistan’s performance on tax collection. Its team had visited Islamabad some one and half months ago to see itself performance of Islamabad on key sectors attacked for the release of next tranche of the bailout pack of $ 3 billion. In the last reciew, IMF had expressed reservations over slow pace of tax collection and warned Pakistani side to make up shortfall, which stood around Rs 200 billion by October 2024. Now with closing of 2024 tax short fall has increased to Rs 386 billion.
This size of short fall can irritate IMF when its team comes for review of Pakistan’s economy in probably February this year. FBR ‘s poor performance on tax collection also negates government ‘s tall claims of restructuring tax collection mechanism. It shows FBR ‘s machinery is operating as usual and the government claims of restructuring the tax system is far from ground realities.