FBR chairman asked to explain reasons behind revenue shortfall

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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.

4 COMMENTS

  1. Revenue shortfall is on account of slow economic growth in the country besides misdirected policies of Govt. Besides few officers who have been accommodated by the newly appointed member operations who only believes in regionalism and have few blue eyed.

  2. Such a massive revenue shortfall in the first half needs serious reflection by P M and F M as country’s economic stability can be affected. Essential measures should be taken immediately before it is too late.

  3. As predicted in my previous posts, the poor choice of the government for Chairman FBR is coming back to bite it. FBR now has a shortfall of Rs. 175 billion in the first half of the financial year, and this will definitely grow to over Rs. 500 billion if the same state of affairs continues.

    Immediately after the appointment of Jahanzeb Khan as Chairman FBR, Rauf Klasra had pointed out the shortcomings of this man, but unfortunately no one took notice. This is a man closely aligned with the interests of Shahbaz Sharif, who accompanied him for negotiations with Chinese firms, who promoted the idea of 56 private companies used for siphoning off billions of rupees, and who is is currently facing NAB inquiries for his role in Saaf Paani and other dubious schemes.

    Jahanzeb Khan is a man who has no leadership qualities. He sits aloof in his office and does not interact with his officers. He seems fond of listening to unverified gossip but is quite indecisive. He got five of his Members transferred out last month, many for no reason, but was later asking different people about who to post as their replacements. Ultimately, he posted two grossly unqualified officers at the key posts of Member Inland Revenue Operations and Member Inland Revenue Policy. Five posts (Member Admin., Member IT, Member HRM, Member Legal (IR), Member FATE) remain vacant till now. Two more posts of DG (BS-21) are going to be vacant soon because of retirements. But Jahanzeb Khan has no clue about what to do in the situation.

    A person with poor communication skills, no knowledge of tax laws or FBR’s working, and clinging on merely due to his relationship with Arbab Shahzad, he is a deadweight which will sink the PTI government’s efforts to improve revenue collection.

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