FBR scales down revenue target to Rs 1,604 billion

Faced with a shortfall of Rs 40 billion in the first five months of the current fiscal year, the Federal Board of Revenue (FBR) has on its own cut down revenue target for 2010-2011 from revised figure of Rs 1,655 billion to Rs 1,604 billion.
In a presentation made to the Finance Ministry recently, FBR clearly showed unavailability to achieve even revised revenue target of Rs 1,655 billion on the ground that the government failure in imposing reformed general sales tax (RGST) from October 31, 2010 made it next to possible for it to achieve ambitious target of Rs 1,655 billion for 2010-2011.
FBR officials argued during the presentation that with slippage in RGST implementation the bus has been missed to even get downward revised revenue target in the remaining seven months of the current fiscal year. The FBR conveyed to the Finance Ministry officials that it had calculated revenue target of Rs 1,667 billion for 2010-2011 budget, which was later revised downward ahead of the government parleys with the International Monetary Fund (IMF) in November.
The government authorities among others had given a firm commitment to IMF that it will make sure to collect Rs 1,655 billion in the current fiscal year and on this assurance the fund granted some concessions to the government of Pakistan.
FBR's clear No to Rs 1,655 billion collection figure shows that it was not on board with the Finance Ministry in formulating Rs 1,677 billion revenue target for this years budget and later downward revision of Rs 12 billion to reset the target at Rs 1,655 billion. The government had fixed revenue target for the current fiscal year at Rs 1,667 billion and all the exercise to estimate the state expenditures and income for 2010-2011, was prepared on the basis of this ambitious target figure.
FBR a government department solely responsible of making revenue estimates to success did not make effort seriously to put its relevant wings at high alert to perform to the decision-makers expectations. This FBR's cautious approach resulted in start of shortfall in collection estimates and actual figure from very first month of the current fiscal year.
Sources said as on November 30, 2010 FBR had suffered Rs 40 billion shortfall against estimated figure. FBR's statistics show that its actual revenue collection till November 30, stood at Rs 494 billion against the target of Rs 534 billion. These sources claim that half-hearted approach towards revenue collection was one of many factors in Sohail Ahmed's removal as FBR chairman. The officials in Finance Ministry will try to make the gap in revenue collection with the coming of Salman Siddique as FBR chairman.