FBR chairman asked to explain reasons behind revenue shortfall

ISLAMABAD: Taking notice of revenue shortfall in the first six months of the current fiscal year 2018-19, Minister of State for Revenue Hammad Azhar has directed the tax department to give a detailed explanation on the matter.

Sources said that Hamad Azhar has sought reasons from the Federal Board of Revenue chairman on Friday with regard to the revenue shortfall.

The tax department was facing a massive shortfall in the first six months of the current fiscal year. Although the department did not officially announce the figures, the sources have revealed that the revenue shortage was around Rs170 billion.

Sources said that the state minister has asked the FBR to give details about the actions it took against the big defaulters and also about the amount collected from these defaulters.

FBR had sent 3,112 tax notices in four phases to the high net worth individuals who were non-filers, but sources said that the department has so far received a poor response from them.

The government has set Rs4,398 billion tax targets for the current fiscal year while the growth in revenue collection was recorded at just two percent in the first half.

Sources said that the government might make another major reshuffle in the headquarters as well as field offices as the department was not giving the desired results to the government.

It is pertinent to mention that last month, the government had transferred five members of Inland Revenue in a bid to improve the performance, but it seems that new team was not fulfilling the government’s expectations.

The tax team had informed that the International Monetary Fund (IMF), in recent negotiations, wanted Rs4,398 billion to be generated through an increase in petroleum sales tax.

Sources said in order to achieve more revenue on petroleum products in the coming months, the department on Monday had issued a notification of increase in sales tax rate on petroleum product by up to 17pc.

Besides this, sources said the FBR was expecting that increased inflation and exchange rate adjustments were likely to have a positive impact on tax revenue collection.

The finance minister already had announced that the government was bringing a mini-budget in the mid of January and work in this regard has also been started. The Ministry of Commerce has also written a letter to chambers of commerce of country asking for suggestions about the mini-budget.

Similarly, the tax department was preparing new recommendation about the mini-budget which would be submitted to the government high ups in the next week.

Pakistan Today tried to contact to high ups of tax department but no response was received till filing of the story.