Revenue collection depicts shortfall during April 2011: FBR Board-in-Council voices concern

Board-in-Council of the Federal Board of Revenue (FBR) expressed serious concern over the shortfall in revenue collection during April 2011 with approximately Rs 25 billion expected from creation/recovery of income tax demand in the field formations.
Sources told Business Recorder here on Monday that a special board-in-council meeting was convened at the FBR House chaired by FBR Chairman Salman Siddique to review the progress on revenue collection during current fiscal. Board-in-Council was informed that the FBR has provisionally collected Rs 86 billion in April 2011 against Rs 93 billion in the corresponding period of last fiscal, reflecting a shortfall of Rs 7 billion.
Tax authorities categorically informed the FBR Members that the achievement of the target of April 2011 is very crucial as it will have direct impact on the revenue collection of current fiscal as well as tax projections for 2011-2012. If the FBR will not be able to meet the target for April 2011, it will have direct affect on the downward revised target for current fiscal. The tax projections for next fiscal would depend on the current pace of revenue collection particularly, in the last quarter of 2010-2011.
It has been observed that the FBR is still behind the actual collection made in the same period last fiscal. At the same time, it is very challenging to meet the revenue collection target of Rs 151.2 billion set for April 2011. The target of Rs 151.2 billion for April 2011 was set to meet the downward revised revenue collection target of Rs 1,588 billion.
According to sources, one of the major reasons for shortfall in April 2011 is that the instalment of the advance tax collection has been made in March 2011 as compared to advance tax collected in April last year. Secondly, around Rs 25 billion has to be collected through demands raised for recovery on the direct taxes side. Out of current income tax demands, the arrears have yet to be recovered. On the other hand, some income tax demands have not been created or created but not recovered. This is a major area of concern where the FBR can generate revenue to bridge the shortfall in April 2011.
Sources said that the FBR had rescinded SRO.564(I)/2006 whereby sales tax was charged on sugar at the rate of Rs 28.88 per kg. Now, the sales tax would be assessed on the actual market price of sugar. Resultantly, the sales tax collection from sugar sector has to show better performance during April 2011. The impact of sales tax collection from sugar would be visible in coming days.
During the Board-in-Council meeting, it was also informed that the FBR has issued 52,000 notices to the un-documented persons, whose authentic profiles have been maintained by the FBR. Field formations have been engaged in issuance of notices and provisional assessments have been made wherever necessary under the law, sources added.
The meeting was also informed that production of few excisable commodities has been declined during the period under review. However, the data showed that the FBR has provisionally collected Rs 11 billion as FED in April 2001 as compared to Rs 9.2 billion in the same period last fiscal.