Amid COVID-19, FBR achieves revised tax collection target for 2019-20

[Shahzaz ud din]

FBR Revenue Collection vis-à-vis Target FBR has collected Rs. 3,828.5 billion during FY 2018-19 against Rs. 3,843.8 billion during FY 2017-18 indicating a negative growth of 0.4%. The revised revenue target of Rs. 4,150 billion has been achieved to the extent of 92.3%. The direct taxes, sales tax, FED and customs missed their respective targets by 12.9%, 2.1%, 10.5% and 6.7% respectively. Unquote

During FY 2018-19, FBR has missed the target by around Rs. 321.5 billion mainly for the following major steps proposed in the budget presented by PMLN.
 Petroleum (-) 96 Billion
 Telecom - Suspension of Withholding Tax by Honorable Supreme Court (-) 55
 Reduced Government Spending (-) 80 Billion
 Import compression (Withholding at import stage) (-) 16 Billion
 Reduced rates on salary income announced in the Budget 2018-19 (-) 50 Billion
 Reduction in Customs Duty (-) 50 Billion

In the last fiscal year, 2017-18, the FBR had collected Rs3,842 billion and this year it is expected to be around Rs3,940 billion, showing the revenue growth of around 2.5 percent.

FBR collected Rs. 3,842 billion during FY 2017-18 against Rs. 3,368 billion during FY 2016-17 denoted a growth of around 14.1%. The growth attained during FY 2017-18 seemed encouraging when compared with growth of 8.2% during FY 2016-17. An additional amount of around Rs.474.3 billion was collected over the collection of previous year. During FY 2017-18, the original revenue target was Rs 4,013 billion which was revised to Rs.3,935 billion. The collection of FY 2017-18 exhibited that revised revenue target has been achieved to the extent of around 98%. The customs duty surpassed its target by 1.4% and direct taxes, sales tax and FED missed the targets by 1.7%, 3.6% and 8.5% respectively.
The Federal Board of Revenue (FBR) collected Rs1.7 trillion or 45% of total revenues at import stage in the end of fiscal year due to a flawed policy that promoted inefficiency in the taxation system and contributed to an increase in prices of goods.
The change in tax structure in PMLN five years led to a situation where 58% of sales tax and 14% of income tax was collected at the import stage in fiscal year 2017-18.
The Rs3.841-trillion collection included tax receipts of roughly Rs90 billion from domestic and offshore tax amnesty schemes. Excluding these, the revenue collection stood at Rs3.751 trillion.
Of the total receipts, Rs1.7 trillion was collected at the import stage on account of sales tax, customs duty, federal excise duty and withholding tax. Sales tax collection at the import stage stood at Rs855 billion, income tax Rs220 billion, federal excise duty Rs15 billion and customs duty Rs610 billion.
Higher reliance at the import stage indicated a flawed tax policy that eventually suffocated economic growth due to increasing cost of goods. This ultimately damaged the output of factories because of reduction in their sales.
Importers and manufacturers recoved these taxes from consumers by including them in the cost.
Over-reliance on the collection of taxes at the import stage also promoted inefficiency as tax officers achieved their collection targets without making any meaningful effort. About 70% of the FBR’s total workforce comprised officers of the Inland Revenue Service, but they collected only 55% of taxes.

 

[volatile]

Care to explain why it is deleted since @mods the title of above reports are misleading and propaganda in reality the performance of PTI lead regime is as below they missed the target by 1.5 Trillion Rs .

https://tribune.com.pk/story/225275...ax-collection-target-by-record-rs158-trillion

FBR misses original tax collection target by record Rs1.58 trillion
Poor governance, Covid-19 outbreak impacts collection
Shahbaz RanaJuly 01, 2020

ISLAMABAD:
Marred by poor governance and outbreak of Coronavirus, the Pakistan Tehreek-e-Insaf (PTI) government has missed its original tax collection target by a record Rs1.58 trillion as it could pool nearly Rs3.981 trillion by end of fiscal year 2019-20.

But the Rs3.981 trillion collection was better than the fourth time downward revised target of Rs3.9 trillion. From July through June of 2019-20, the FBR provisionally pooled Rs3.981 trillion, which was higher by Rs154 billion or 4% compared to fiscal year 2018-19, FBR officials told The Express Tribune.

However, after adjusting Rs100 billion refunds, which were given from the budget and Rs30 billion pending refunds of the textile sector, the 2019-20 collection was almost at par with last year’s level when the FBR had collected Rs3.828 trillion in taxes.

Collection was partially impacted by spread of respiratory disease. The FBR also lost more than 37 officers, including a grade-22 officer, Zahid Khokhar, due to the contagion. This time the FBR did not resort to the practice of huge advances, although this trend continued till April.

The new Member Operations FBR, Mohammad Ashfaq, had also given instructions to his team not to force the taxpayers to pay taxes in advances. While breaking from the past practice, the FBR also paid tax refunds even on the last day of the fiscal year.

On Tuesday, FBR paid Rs7.9 billion tax refunds, which is encouraging sign of building trust with the taxpayers.

The tax collection for the third consecutive year, including two years of the PTI government, remained short of even Rs4 trillion psychological barrier. The Rs3.981 trillion provisional collection was short of Rs4 trillion despite the fact government, for the first time, paid Rs100 billion tax refunds from the budget, which tantamount to inflating revenues.

The Rs3.981 trillion collection was less by Rs1.575 trillion or 28.4% as compared to the original target of Rs5.555 trillion approved by National Assembly in June last year.

The three downward revisions in tax collection target came before the outbreak of Covid-19, while the fourth revision had been necessitated due to the deadly outbreak that largely crippled industrial and services sectors.

To achieve Rs5.555 trillion target, the PTI government had imposed the highest ever Rs735 billion in additional taxes.

While conceding to the International Monetary Fund’s (IMF) demand to set the Rs5.555 trillion tax collection target, Prime Minister Imran Khan had taken personal responsibility to achieve the goal post.

The premier had brought in his trustworthy Shabbar Zaidi as the FBR Chairman to achieve the target. But Zaidi too could not resist the political and bureaucratic pressures and resigned in February this year after staying away from office for two months.

The Rs5.555-trillion tax collection target was expected to be missed by Rs900 billion even before the coronavirus outbreak due to unsatisfactory performance of the FBR and the PTI government’s decision to compromise with pressure groups, including traders.

Blowing away the third opportunity in two decades to rope traders in to the tax net, the federal government in November last year succumbed to their pressure and agreed to give them sweeping concessions, including relaxation in registration conditions, reduction of income tax rates by 66% and postponement of the CNIC condition.

Two major concessions—sales tax registration exemption for traders paying up to Rs1.2 million annually in electricity bills and owning a 1,000 square feet shop – rendered the CNIC condition largely ineffective.

In the last fiscal year, the FBR received Rs3.829 trillion in taxes, which was lower than the preceding year’s collection despite two mini-budgets introduced during the course of the year.

Even if economic activities had remained unaffected, the FBR would have missed its annual target by at least Rs900 billion to Rs1 trillion, according to Ashfaq Yousaf Tola, chairman of the government’s Budget Anomaly Committee 2020.

In April this year, the Tola Associates had stated that FBR’s tax collection may fall short of the target by a whopping Rs1.5 trillion to only Rs4 trillion in the aftermath of coronavirus outbreak that would further increase the country’s debt burden.

The FBR’s machinery had also not wholeheartedly cooperated with former FBR chairman Zaidi. Postings of few officers with questionable reputation as head of regional tax offices also compromised the tax collection, according to sources in the FBR. Some of them are still at key posts.

Tax-wise Break Up

The FBR collected Rs1.492 trillion in income tax in the just ended fiscal year – higher by Rs68 billion or 4.8% over the preceding year. A key factor for the increase in income tax collection was the restoration of mobile phone taxes. The original income tax target was Rs2.027 trillion, which the FBR missed by a wide margin of Rs535 billion.

The FBR provisionally collected Rs1.592 trillion in sales tax, which was higher by Rs131.2 billion or 9% over the preceding year. The collection was increased because of withdrawal of imposition of 17% sales tax on domestic sales of textile, garments, surgical, sport and leather goods. The original sales tax target was Rs2.2 trillion that the FBR missed by a margin of Rs608 billion.

The tax machinery collected Rs257.5 billion in federal excise duty – up by Rs16.6 billion or 6.9% over the preceding year. However, its original excise duty collection target was Rs384 billion that it missed by a margin of Rs127 billion.

The custom duties collection stood at Rs619.3 billion -- down by Rs60.3 billion or 8.9% as compared to the preceding year. The original target was Rs889 billion that FBR missed by a margin of Rs270 billion.

The FBR paid Rs134.8 billion in refunds in the just ended fiscal year as against Rs69 billion in the fiscal year 2018-19. The Rs134.8 billion refunds were in addition to Rs100 billion paid from the regular budget.

The massive shortfall in tax collection is going to hurt the country’s fiscal sustainability. In the fiscal year 2018-19, Pakistan’s public debt-to-gross domestic product (GDP) ratio deteriorated to 88%, which is now expected to worsen further to 92% due to the shortfall in tax revenues and higher expenditures.

The finance ministry has projected that the country’s fiscal deficit would be around 9.4% of the GDP due to a large revenue shortfall and increase in expenditures.

“We were on our way and we had 17% collection but as soon as Covid-19 came, it affected all the economies, so a direct consequence was that our target had to be revised to Rs3.9 trillion and we had a Rs1 trillion shortfall”, Prime Minister Imran Khan stated at the floor of the National Assembly on Tuesday.

Before Covid-19, the FBR was supposed to achieve 45% growth in revenues but its revenues were growing at a rate of 16.5%.

For the new fiscal year, the government has set the FBR’s target at Rs4.963 trillion. But on June 13th, Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh said that “I cannot say with confidence that it [Rs4.963 trillion target] can be achieved but we should make efforts”.

He went on to say that the provinces should make their budgets while keeping in mind the FBR’s past performance and difference between performance, projections and reality.

 

[Patriot forever]

View attachment 647039
Care to explain why it is deleted since @mods the title of above reports are misleading and propaganda in reality the performance of PTI lead regime is as below they missed the target by 1.5 Trillion Rs .

https://tribune.com.pk/story/225275...ax-collection-target-by-record-rs158-trillion

FBR misses original tax collection target by record Rs1.58 trillion
Poor governance, Covid-19 outbreak impacts collection
Shahbaz RanaJuly 01, 2020

ISLAMABAD:
Marred by poor governance and outbreak of Coronavirus, the Pakistan Tehreek-e-Insaf (PTI) government has missed its original tax collection target by a record Rs1.58 trillion as it could pool nearly Rs3.981 trillion by end of fiscal year 2019-20.

But the Rs3.981 trillion collection was better than the fourth time downward revised target of Rs3.9 trillion. From July through June of 2019-20, the FBR provisionally pooled Rs3.981 trillion, which was higher by Rs154 billion or 4% compared to fiscal year 2018-19, FBR officials told The Express Tribune.

However, after adjusting Rs100 billion refunds, which were given from the budget and Rs30 billion pending refunds of the textile sector, the 2019-20 collection was almost at par with last year’s level when the FBR had collected Rs3.828 trillion in taxes.

Collection was partially impacted by spread of respiratory disease. The FBR also lost more than 37 officers, including a grade-22 officer, Zahid Khokhar, due to the contagion. This time the FBR did not resort to the practice of huge advances, although this trend continued till April.

The new Member Operations FBR, Mohammad Ashfaq, had also given instructions to his team not to force the taxpayers to pay taxes in advances. While breaking from the past practice, the FBR also paid tax refunds even on the last day of the fiscal year.

On Tuesday, FBR paid Rs7.9 billion tax refunds, which is encouraging sign of building trust with the taxpayers.

The tax collection for the third consecutive year, including two years of the PTI government, remained short of even Rs4 trillion psychological barrier. The Rs3.981 trillion provisional collection was short of Rs4 trillion despite the fact government, for the first time, paid Rs100 billion tax refunds from the budget, which tantamount to inflating revenues.

The Rs3.981 trillion collection was less by Rs1.575 trillion or 28.4% as compared to the original target of Rs5.555 trillion approved by National Assembly in June last year.

The three downward revisions in tax collection target came before the outbreak of Covid-19, while the fourth revision had been necessitated due to the deadly outbreak that largely crippled industrial and services sectors.

To achieve Rs5.555 trillion target, the PTI government had imposed the highest ever Rs735 billion in additional taxes.

While conceding to the International Monetary Fund’s (IMF) demand to set the Rs5.555 trillion tax collection target, Prime Minister Imran Khan had taken personal responsibility to achieve the goal post.

The premier had brought in his trustworthy Shabbar Zaidi as the FBR Chairman to achieve the target. But Zaidi too could not resist the political and bureaucratic pressures and resigned in February this year after staying away from office for two months.

The Rs5.555-trillion tax collection target was expected to be missed by Rs900 billion even before the coronavirus outbreak due to unsatisfactory performance of the FBR and the PTI government’s decision to compromise with pressure groups, including traders.

Blowing away the third opportunity in two decades to rope traders in to the tax net, the federal government in November last year succumbed to their pressure and agreed to give them sweeping concessions, including relaxation in registration conditions, reduction of income tax rates by 66% and postponement of the CNIC condition.

Two major concessions—sales tax registration exemption for traders paying up to Rs1.2 million annually in electricity bills and owning a 1,000 square feet shop – rendered the CNIC condition largely ineffective.

In the last fiscal year, the FBR received Rs3.829 trillion in taxes, which was lower than the preceding year’s collection despite two mini-budgets introduced during the course of the year.

Even if economic activities had remained unaffected, the FBR would have missed its annual target by at least Rs900 billion to Rs1 trillion, according to Ashfaq Yousaf Tola, chairman of the government’s Budget Anomaly Committee 2020.

In April this year, the Tola Associates had stated that FBR’s tax collection may fall short of the target by a whopping Rs1.5 trillion to only Rs4 trillion in the aftermath of coronavirus outbreak that would further increase the country’s debt burden.

The FBR’s machinery had also not wholeheartedly cooperated with former FBR chairman Zaidi. Postings of few officers with questionable reputation as head of regional tax offices also compromised the tax collection, according to sources in the FBR. Some of them are still at key posts.

Tax-wise Break Up

The FBR collected Rs1.492 trillion in income tax in the just ended fiscal year – higher by Rs68 billion or 4.8% over the preceding year. A key factor for the increase in income tax collection was the restoration of mobile phone taxes. The original income tax target was Rs2.027 trillion, which the FBR missed by a wide margin of Rs535 billion.

The FBR provisionally collected Rs1.592 trillion in sales tax, which was higher by Rs131.2 billion or 9% over the preceding year. The collection was increased because of withdrawal of imposition of 17% sales tax on domestic sales of textile, garments, surgical, sport and leather goods. The original sales tax target was Rs2.2 trillion that the FBR missed by a margin of Rs608 billion.

The tax machinery collected Rs257.5 billion in federal excise duty – up by Rs16.6 billion or 6.9% over the preceding year. However, its original excise duty collection target was Rs384 billion that it missed by a margin of Rs127 billion.

The custom duties collection stood at Rs619.3 billion -- down by Rs60.3 billion or 8.9% as compared to the preceding year. The original target was Rs889 billion that FBR missed by a margin of Rs270 billion.

The FBR paid Rs134.8 billion in refunds in the just ended fiscal year as against Rs69 billion in the fiscal year 2018-19. The Rs134.8 billion refunds were in addition to Rs100 billion paid from the regular budget.

The massive shortfall in tax collection is going to hurt the country’s fiscal sustainability. In the fiscal year 2018-19, Pakistan’s public debt-to-gross domestic product (GDP) ratio deteriorated to 88%, which is now expected to worsen further to 92% due to the shortfall in tax revenues and higher expenditures.

The finance ministry has projected that the country’s fiscal deficit would be around 9.4% of the GDP due to a large revenue shortfall and increase in expenditures.

“We were on our way and we had 17% collection but as soon as Covid-19 came, it affected all the economies, so a direct consequence was that our target had to be revised to Rs3.9 trillion and we had a Rs1 trillion shortfall”, Prime Minister Imran Khan stated at the floor of the National Assembly on Tuesday.

Before Covid-19, the FBR was supposed to achieve 45% growth in revenues but its revenues were growing at a rate of 16.5%.

For the new fiscal year, the government has set the FBR’s target at Rs4.963 trillion. But on June 13th, Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh said that “I cannot say with confidence that it [Rs4.963 trillion target] can be achieved but we should make efforts”.

He went on to say that the provinces should make their budgets while keeping in mind the FBR’s past performance and difference between performance, projections and reality.

It was an over ambitious target,, one of the reasons being negotiations with IMF. They set it to achieve the maximum possible, as Asad Umer mentioned in the begining of year. Normally the revenue collection is doubled in the last 4-5 months, we already achieved 2.4 billion in the first 7 months (an increase of 17%) had it not been for the Covid we would have easily crossed 4.5 trillion minimum, highest recorded rise in our history that too in an environment where imports are actively curtailed. The same is the case this year.

 

[Dil_Pakistan]

View attachment 647039
Care to explain why it is deleted since @mods the title of above reports are misleading and propaganda in reality the performance of PTI lead regime is as below they missed the target by 1.5 Trillion Rs .

https://tribune.com.pk/story/225275...ax-collection-target-by-record-rs158-trillion

FBR misses original tax collection target by record Rs1.58 trillion
Poor governance, Covid-19 outbreak impacts collection
Shahbaz RanaJuly 01, 2020

ISLAMABAD:
Marred by poor governance and outbreak of Coronavirus, the Pakistan Tehreek-e-Insaf (PTI) government has missed its original tax collection target by a record Rs1.58 trillion as it could pool nearly Rs3.981 trillion by end of fiscal year 2019-20.

But the Rs3.981 trillion collection was better than the fourth time downward revised target of Rs3.9 trillion. From July through June of 2019-20, the FBR provisionally pooled Rs3.981 trillion, which was higher by Rs154 billion or 4% compared to fiscal year 2018-19, FBR officials told The Express Tribune.

However, after adjusting Rs100 billion refunds, which were given from the budget and Rs30 billion pending refunds of the textile sector, the 2019-20 collection was almost at par with last year’s level when the FBR had collected Rs3.828 trillion in taxes.

Collection was partially impacted by spread of respiratory disease. The FBR also lost more than 37 officers, including a grade-22 officer, Zahid Khokhar, due to the contagion. This time the FBR did not resort to the practice of huge advances, although this trend continued till April.

The new Member Operations FBR, Mohammad Ashfaq, had also given instructions to his team not to force the taxpayers to pay taxes in advances. While breaking from the past practice, the FBR also paid tax refunds even on the last day of the fiscal year.

On Tuesday, FBR paid Rs7.9 billion tax refunds, which is encouraging sign of building trust with the taxpayers.

The tax collection for the third consecutive year, including two years of the PTI government, remained short of even Rs4 trillion psychological barrier. The Rs3.981 trillion provisional collection was short of Rs4 trillion despite the fact government, for the first time, paid Rs100 billion tax refunds from the budget, which tantamount to inflating revenues.

The Rs3.981 trillion collection was less by Rs1.575 trillion or 28.4% as compared to the original target of Rs5.555 trillion approved by National Assembly in June last year.

The three downward revisions in tax collection target came before the outbreak of Covid-19, while the fourth revision had been necessitated due to the deadly outbreak that largely crippled industrial and services sectors.

To achieve Rs5.555 trillion target, the PTI government had imposed the highest ever Rs735 billion in additional taxes.

While conceding to the International Monetary Fund’s (IMF) demand to set the Rs5.555 trillion tax collection target, Prime Minister Imran Khan had taken personal responsibility to achieve the goal post.

The premier had brought in his trustworthy Shabbar Zaidi as the FBR Chairman to achieve the target. But Zaidi too could not resist the political and bureaucratic pressures and resigned in February this year after staying away from office for two months.

The Rs5.555-trillion tax collection target was expected to be missed by Rs900 billion even before the coronavirus outbreak due to unsatisfactory performance of the FBR and the PTI government’s decision to compromise with pressure groups, including traders.

Blowing away the third opportunity in two decades to rope traders in to the tax net, the federal government in November last year succumbed to their pressure and agreed to give them sweeping concessions, including relaxation in registration conditions, reduction of income tax rates by 66% and postponement of the CNIC condition.

Two major concessions—sales tax registration exemption for traders paying up to Rs1.2 million annually in electricity bills and owning a 1,000 square feet shop – rendered the CNIC condition largely ineffective.

In the last fiscal year, the FBR received Rs3.829 trillion in taxes, which was lower than the preceding year’s collection despite two mini-budgets introduced during the course of the year.

Even if economic activities had remained unaffected, the FBR would have missed its annual target by at least Rs900 billion to Rs1 trillion, according to Ashfaq Yousaf Tola, chairman of the government’s Budget Anomaly Committee 2020.

In April this year, the Tola Associates had stated that FBR’s tax collection may fall short of the target by a whopping Rs1.5 trillion to only Rs4 trillion in the aftermath of coronavirus outbreak that would further increase the country’s debt burden.

The FBR’s machinery had also not wholeheartedly cooperated with former FBR chairman Zaidi. Postings of few officers with questionable reputation as head of regional tax offices also compromised the tax collection, according to sources in the FBR. Some of them are still at key posts.

Tax-wise Break Up

The FBR collected Rs1.492 trillion in income tax in the just ended fiscal year – higher by Rs68 billion or 4.8% over the preceding year. A key factor for the increase in income tax collection was the restoration of mobile phone taxes. The original income tax target was Rs2.027 trillion, which the FBR missed by a wide margin of Rs535 billion.

The FBR provisionally collected Rs1.592 trillion in sales tax, which was higher by Rs131.2 billion or 9% over the preceding year. The collection was increased because of withdrawal of imposition of 17% sales tax on domestic sales of textile, garments, surgical, sport and leather goods. The original sales tax target was Rs2.2 trillion that the FBR missed by a margin of Rs608 billion.

The tax machinery collected Rs257.5 billion in federal excise duty – up by Rs16.6 billion or 6.9% over the preceding year. However, its original excise duty collection target was Rs384 billion that it missed by a margin of Rs127 billion.

The custom duties collection stood at Rs619.3 billion -- down by Rs60.3 billion or 8.9% as compared to the preceding year. The original target was Rs889 billion that FBR missed by a margin of Rs270 billion.

The FBR paid Rs134.8 billion in refunds in the just ended fiscal year as against Rs69 billion in the fiscal year 2018-19. The Rs134.8 billion refunds were in addition to Rs100 billion paid from the regular budget.

The massive shortfall in tax collection is going to hurt the country’s fiscal sustainability. In the fiscal year 2018-19, Pakistan’s public debt-to-gross domestic product (GDP) ratio deteriorated to 88%, which is now expected to worsen further to 92% due to the shortfall in tax revenues and higher expenditures.

The finance ministry has projected that the country’s fiscal deficit would be around 9.4% of the GDP due to a large revenue shortfall and increase in expenditures.

“We were on our way and we had 17% collection but as soon as Covid-19 came, it affected all the economies, so a direct consequence was that our target had to be revised to Rs3.9 trillion and we had a Rs1 trillion shortfall”, Prime Minister Imran Khan stated at the floor of the National Assembly on Tuesday.

Before Covid-19, the FBR was supposed to achieve 45% growth in revenues but its revenues were growing at a rate of 16.5%.

For the new fiscal year, the government has set the FBR’s target at Rs4.963 trillion. But on June 13th, Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh said that “I cannot say with confidence that it [Rs4.963 trillion target] can be achieved but we should make efforts”.

He went on to say that the provinces should make their budgets while keeping in mind the FBR’s past performance and difference between performance, projections and reality.

LOL, presenting an article by Shahbaz Rana, a person who is known to be strong critic and have strong bias against Government and then complaining about OP being biased.
The OP article clearly mentions "revised" in title. How is it misleading? Rest it reports FBR spokesperson statement. Now it could be said that they are presenting through a certain lens. But it's simply quoting and not inserting "analysis" of own as news or facts.

 

[volatile]

Very easy to answer ARY news clip makes thread forum ,did you read whats in there ?

LOL, presenting an article by Shahbaz Rana, a person who is known to be strong critic and have strong bias against Government and then complaining about OP being biased.
The OP article clearly mentions "revised" in title. How is it misleading? Rest it reports FBR spokesperson statement. Now it could be said that they are presenting through a certain lens. But it's simply quoting and not inserting "analysis" of own as news or facts.

It was an over ambitious target,, one of the reasons being negotiations with IMF. They set it to achieve the maximum possible, as Asad Umer mentioned in the begining of year. Normally the revenue collection is doubled in the last 4-5 months, we already achieved 2.4 billion in the first 7 months (an increase of 17%) had it not been for the Covid we would have easily crossed 4.5 trillion minimum, highest recorded rise in our history that too in an environment where imports are actively curtailed. The same is the case this year.

Unfortunately the same IMF reforms and IK reforms were drumed 2 years which lacks substance ,In the end its all excuses ,we have expenditures and income and Govt cant lie or missed targets all the time ,e.g 3.9 GDP stated growth VS 1.9 Actual in 2019

 

[ps3linux]

Wish you a speedy recovery. I agree that it would be unrealistic to expect any government to achieve 5.5tn in this fiscal year, and with covid less than 4tn is completely understandable. At this time IK’s situation is completely unenviable imo, it’s literally between a rock and a few hard places.

On one hand covid will cause a recession even in nominal terms, in the other hand we have no fiscal space to respond. And while the IMF demands reduction of twin deficits, we have no space to tax more or expand revenue and require stimulus just to stop an already deep downturn. Honestly, I’d say IK is possibly one of the unluckiest PMs from the perspective of financial crises, two perfect storms he walked into which are beyond his control and now even beyond our ability to respond, the rest whatever his achievements or shortcomings are his own earning.

People in my line of work cannot afford to taint their analysis based upon political affiliation or view, while I have my own political views but for all intent and purposes when I make an analysis on the economy I do not factor in my personal views.

IK is definitely one unlucky person, one disaster after the other every one knew FBR targets set by IMF were unrealistic to start with, but beings beggars as we are, GoP had to give in to IMF demands.

The artificial fixing of dollar price was hurting the economy in the worst of manner, CAD was out of control. Previous Govt knew that the stupid decisions they are taking are going to hurt the country and economy for at-least a decade, but they did it on purpose.

When IMF's demands of such a high revenue target, along significant devaluation of currency were accepted our stupid and corrupt bureaucrats did not fight the case that a significant portion of FBR revenue comes from import duties. They never did argue With devaluation of currency we are not only making the imports expensive across the board, but for import dependent industries cost of doing business will increase, with a significant revision in policy rates cost of doing business will increase exponentially and hence a cut down on jobs and hence a slow down in economy which we observed.

A major portion of GoP revenue is being eaten up by debt servicing, I am one person who has been lobbying for almost a decade that NSS should be banned across the board and GoP should focus on developing the secondary debt market through GoP paper to individual in smaller chunks may be 10k, instead of current 5 million and more.

@niaz Sir jee, I have been playing with maths/stats for over two decades of my professional life. I had concluded long time ago that statistical measures are nothing more than window dressing when described in a decent way, and in layman terms fraud.

e.g; corporate commit fraud with their employees during annual salary revision, "a 20% salary increase was given to all employees across the board". It is as stupid as it gets, a 20% increase for an employee getting 25000 per month is only 5000 per months, good for 5 bags of flour. While 20% increase for an employee getting half a mil is 125k. But that's how stats work.

Economy is more like a giant jigsaw puzzle, each part of the puzzle is equally important, or its is actually a complex mathematical equation with multiple factors and variables, change one and the end result will be different.

Change other and you'll get a different result, so on and so forth. Abbassi has no background in economics and his bias in analysis is evident to everyone, his affiliation to a certain political party and his group's affiliation is known so even if I have too much time to waste I wont bother even skimming through his rants.

15 years data has two anomalies first how was the target set, did at any point in time they target double digit tax net as a percentage of population? percentage achievement in a stable world is different compared to current turbulent world. and about figure fudging that's would require an entire book worth of material for me to write as to how the corrupt bureaucrats have been fudging the figures of FBR revenue to an extent that twice GoP was fined millions of dollars for presenting fraudulent figures. Figure fudging is not only a routine at Govt level but it is a component of our DNA much to my chagrin. Just two tiny examples bankers practically beg depositors for one day on 31st December and 30th june just so that the management could claim they had this much of deposit on the closing dates, the practice is so nauseating that many a times client is requested to draw from their financing lines and deposit in their current accounts, thus banks get bot asset and liability, the mark up for withdrawal is paid by the banker off the books. Second while declaring quarterly result EPS is announced in bold while short term liabilities/accounts payable well we know what happens.

Then there is one more aspect and I call it intellectual dishonesty, many of the columnist an economists who write for one media outlet or the other commit this blatantly and try and form opinions with half baked facts and false conclusions.

Incumbent Govt missing the FBR revenue targets, revising twice or whatever, still managing 4 trillion to me is a miracle. Stupidly exorbitant interest rates not only created inflation, a reduction in demand, lower sales and profitability for corporate as it had a direct impact on cost of doing business. Increase in fuel prices/dollar prices/ depending on the industry all had an impact on the profitability of companies. LSM is practically shutdown, its SME or commercial in limited capacity of work.

Add to it that since March imports are practically shut down, LCs are stuck so is raw material, import dependent industry is out of raw material, thus no tax from import duties. No raw material no business no sales and no tax, add Mr. Khan's innate stupidity of kicking up every hornet's nest he could think of and you have the perfect recipe for disaster.

Due to my work specialty and family business interests I interact with chamber of commerce across the board, had it not been another mafia of businessmen country would have been in a much better position.

Discuss anything and you will find the trail of corruption up to DNA level, I don't discount Mr. Khan's stupidity or his selection of team, but they all represent our national character. But one thing is for sure the structural reforms will take place, with a blessing like grey listing by FATF corruption will decrease except if its Billo league Govt and Pakistan will prosper.

Take PIAs pilots case my father was with Mushaf Ali Mir when fraudulent pilots, fake degrees/licenses matter was unearthed and same was mentioned in his report in detail, now when finally it hits us right in the face its IK's fault, they might have mismanaged the communication but the disease was already there and who had been ruling in all those years, definitely not IK.

I know its nothing to cherish for over achieving revenue target, but when you read through my lines, try an factor in the issues faced this year to me its nothing short of a miracle.

We have unchecked screwing of national character/grooming for over 70 years and we want all of it fixed in two years, we are definitely not living in reality, perhaps a lal lal land. There is too much to fix and the problem is being compounded by the ever presence of legal pim*s and legal pros*****, sorry I meant liars and fudges, missed gain lawyer and judges.

I went through that for a couple of weeks. I couldn't even concentrate on netflix.

Its worse for me, unlike better half and both boys I am experiencing excruciating body aches and splitting headache, Oxygen did fall below 85% but since I am what I am, I had the presence of mind to purchase about a dozen mini ventilators called BI-PAP along oxygen concentrators and accessories earlier this year for donating to public hospitals as "Waqf" kept two for the family and I tell you honestly they are wonderful machines and help a lot. Soon as my oxygen level dropped below 85% used it and within few minutes I was feeling pretty good.

 

[niaz]

During FY 2018-19, FBR has missed the target by around Rs. 321.5 billion mainly for the following major steps proposed in the budget presented by PMLN.
 Petroleum (-) 96 Billion
 Telecom - Suspension of Withholding Tax by Honorable Supreme Court (-) 55
 Reduced Government Spending (-) 80 Billion
 Import compression (Withholding at import stage) (-) 16 Billion
 Reduced rates on salary income announced in the Budget 2018-19 (-) 50 Billion
 Reduction in Customs Duty (-) 50 Billion


FBR collected Rs. 3,842 billion during FY 2017-18 against Rs. 3,368 billion during FY 2016-17 denoted a growth of around 14.1%. The growth attained during FY 2017-18 seemed encouraging when compared with growth of 8.2% during FY 2016-17. An additional amount of around Rs.474.3 billion was collected over the collection of previous year. During FY 2017-18, the original revenue target was Rs 4,013 billion which was revised to Rs.3,935 billion. The collection of FY 2017-18 exhibited that revised revenue target has been achieved to the extent of around 98%. The customs duty surpassed its target by 1.4% and direct taxes, sales tax and FED missed the targets by 1.7%, 3.6% and 8.5% respectively.
The Federal Board of Revenue (FBR) collected Rs1.7 trillion or 45% of total revenues at import stage in the end of fiscal year due to a flawed policy that promoted inefficiency in the taxation system and contributed to an increase in prices of goods.
The change in tax structure in PMLN five years led to a situation where 58% of sales tax and 14% of income tax was collected at the import stage in fiscal year 2017-18.
The Rs3.841-trillion collection included tax receipts of roughly Rs90 billion from domestic and offshore tax amnesty schemes. Excluding these, the revenue collection stood at Rs3.751 trillion.
Of the total receipts, Rs1.7 trillion was collected at the import stage on account of sales tax, customs duty, federal excise duty and withholding tax. Sales tax collection at the import stage stood at Rs855 billion, income tax Rs220 billion, federal excise duty Rs15 billion and customs duty Rs610 billion.
Higher reliance at the import stage indicated a flawed tax policy that eventually suffocated economic growth due to increasing cost of goods. This ultimately damaged the output of factories because of reduction in their sales.
Importers and manufacturers recoved these taxes from consumers by including them in the cost.
Over-reliance on the collection of taxes at the import stage also promoted inefficiency as tax officers achieved their collection targets without making any meaningful effort. About 70% of the FBR’s total workforce comprised officers of the Inland Revenue Service, but they collected only 55% of taxes.

Hon Sir,

My info only comes from the newspaper articles, thus it is bound to include personal bias of the writer. You are obviously more knowledgable in Pakistan Tax matter than me and I thank you for the detailed analysis.

 

[niaz]

@niaz Sir jee, I have been playing with maths/stats for over two decades of my professional life. I had concluded long time ago that statistical measures are nothing more than window dressing when described in a decent way, and in layman terms fraud.

Lies, Damned Lies, and Statistics is a quote most probably by Sir Charles Dike sometimes in the 1890s. This refers to the misuse of statistics to support/ prove your point of view; akin to calling a glass half empty or half full in accordance with the situation.

All the misapplications notwithstanding; statistics play an influential role in persuading public opinion. This makes Statistics necessary for the politicians/bureaucrats and the intelligentsia to critically evaluate the data on various subjects. For example, you need Demographic statistics to estimate the requirements for food, health, number of schools, housing, etc for a town or a country.

During the Covid-19 crisis, UK gov't relied on the data from the National Office of Statistics to decide on the procedure for easing of the lock-down.

IMHO fraud is not quite the right word because most of the time the predictions based on the statistical models are correct. You can call Statistics a 'Double-edged sword' that can be used to manipulate public opinion by the wily politicians and marketing companies and also by the medical companies to estimate the number of vaccines required for a given country to treat an infectious disease.

 

[Morpheus]

Tax experts laud FBR for exceeding revenue collection target by Rs92bn

By
Hassan Naqvi
-
July 2, 2020
0
261

LAHORE: The country’s leading tax experts have lauded the Federal Board of Revenue (FBR) for exceeding the FY20 revenue collection target of Rs3,908 billion by Rs92 billion given the adverse economic condition created due to Covid-19.

Talking to Profit, tax consultant, Dr Ikramul Haq appreciated FBR’s performance and said that the FBR had exceeded the tax collection target by Rs92 billion and collected Rs4,126 billion at a time when businesses are closed, imports are largely suspended and duties have been slashed to provide ease to businesses.

He further added that the FBR has paid Rs122 billion in refunds of sales tax and income tax for FY20 compared to last year’s refunds of Rs53 billion to Rs69 billion.

According to Ikramul Haq during FY20, FBR paid Rs95 billion in sales tax refunds compared to just Rs21 billion paid in FY19. Additionally, an amount of Rs70 billion was paid to clear outstanding refunds through the Technical Supplementary Grant (TSG).




He further added that these refunds had previously been blocked by Pakistan Muslim League Nawaz (PMLN) government.

“It is unfair to say that FBR’s collection is overstated by paying through TSG,” he said.

Tax consultant Huzaima Bukhari said that the most admirable step by the FBR was its strict adherence to collecting only due taxes and not taking any advances.


She added that the new FBR member operations had earlier given clear instructions to the tax collection authority to not force taxpayers to pay taxes in advance.

Bukhari further said that FBR had broken away from past practices and had paid tax refunds till the last day of FY20.

She maintained that collection figures reflect net tax collection which registered a growth of 4.3 per cent over last year when growth stood at a negative 0.4 per cent.

“It is an extraordinary feat by FBR considering that the country has been under strict lockdown during April and May,” she said.


https://profit.pakistantoday.com.pk...xceeding-revenue-collection-target-by-rs92bn/

-------------------

@niaz Remember when i was talking about the refund being easy now. My business didn't get refunds that they were rightfully entitled to in 2015 to 2017. This is why business try to dodge paying taxes. The law says you get that money back, but corrupt govt don't want to refund it. They want to hold on to that money.

@Syed1. Previous govt refused to give refunds that was part of the law. That is why they were able to report high taxes. I am sure if they refunded all the amount that was rightful due, the tax collected would be low.

 

[volatile]

Those applauding FBR like ARY propaganda channel must be ashmed after seeing this news .

https://www.geo.tv/latest/296281-nausheen-javed-removed-as-fbr-chairman-sources

if the performance was so good why she was replaced .

The new appointment marks the fourth time the top tax authority has seen a change in leadership since PTI came into power.

Prior to Amjad's predecessor Zaidi's appointment (May 2019 to April 2020), Mohammad Jehanzeb Khan was in office (August 2018 to May 2019).

The institution itself has also been beset by troubles, chief of which has been a decline in tax collection.

The FBR’s performance was not much encouraging during fiscal year 2018-19 as the apex tax authority posted negative growth the first time in the past half century. It collected Rs3.8 trillion in 2018-19 and failed to reach numbers of the preceding year.

The FBR collected Rs3.5 trillion during the July-May period of 2019-20. “The overall collection declined by 0.4% which is Rs15.3 billion lesser than the collection of FY2017-18,” the FBR said. “Last time negative growth of 2.6% in the FBR revenue collection was recorded in 1967-68.”

The collection during the outgoing year's last three months, in particular, witnessed a significant decline due to the adverse impact of the COVID-19 lockdown and it registered 31% year-on-year decline in May.

The FBR’s offices were subsequently given a slashed target of Rs415.5 billion for June, whereas it had collected Rs518 billion in June last year.

 

[Verve]

I was not aware of that exact figure

It would be good to make yourself aware before diving in and passing judgements. Just as you did when you claimed that 'no other country automatically convicts for failing to provide money trail' when your own country of residence does exactly that!

But you are who you are ...

 

[Jungibaaz]

It would be good to make yourself aware before diving in and passing judgements. Just as you did when you claimed that 'no other country automatically convicts for failing to provide money trail' when your own country of residence does exactly that!

But you are who you are ...

I know more than enough to speak about the budget and macroeconomic conditions in Pakistan. What is your gripe exactly, that I wasn’t aware how much of an increase in tax revenue was exactly managed in the first 11 months? Do you know the figure at 3 month mark? Or 7 months etc?

Get over yourself, if you’re going to challenge my posts in this thread, pick out a quote and let’s discuss.

 

[Verve]

I know more than enough to speak about the budget and macroeconomic conditions in Pakistan. What is your gripe exactly, that I wasn’t aware how much of an increase in tax revenue was exactly managed in the first 11 months? Do you know the figure at 3 month mark? Or 7 months etc?

Get over yourself, if you’re going to challenge my posts in this thread, pick out a quote and let’s discuss.

Import taxes have declined significantly (due to an obvious decline in imports - Deficit has gone down from $20bn at the end of PMLN tenure to $3bn now!!) so a much bigger part of the tax collection this year was internally as well as from increase in exports - and that is a real positive!

If you know macroeconomics well enough, you will have not have difficulty making sense of the above sentence!

 

[Jungibaaz]

If you knew so well then that import taxes have declined significantly (due to an obvious decline in imports - Deficit has gone down from $20bn to $3bn!!) so a much bigger part of the tax collection this year was internally as well as from increase in exports - and that is a real positive!

Thanks, but am already aware of that.

Is that all you have to add?

If you know macroeconomics well enough, you will have not have difficulty making sense of the above sentence!

Sure, I understand it and was aware before. If you take issue with anything I’ve said here, or wish to correct me on something in this thread, something to prove etc, pls quote me and we can talk.

 

[Verve]

Thanks, but am already aware of that.

Is that all you have to add?



Sure, I understand it and was aware before. If you take issue with anything I’ve said here, or wish to correct me on something in this thread, something to prove etc, pls quote me and we can talk.

Revised target is understandably woeful but ‘achieving it’ as if you did something brilliant is a joke.

Joke is on you who is now claiming 'am already aware of that' ... If you breakdown the collection streams (imports taxes, export taxes, local taxes such as Income Tax, GST etc) and compare the streams and split %s from previous government, you should (but unlikely) realise that you need to study macroeconomics a bit more and research your figures properly before making wild statements!