The Federal Board of Revenue (FBR) will not be able to meet the revised target of Rs 3.908 trillion for 2019-20 even after the resumption of economic activity during the last fortnight of Ramazan for Eid-ul-Fitr, sources said.

In what appears to be major fallout from Covid-19, the FBR would not be able to achieve the revised target despite the resumption of business operations. The sources added that the revenue collection from the energy sector has dropped drastically, ie, by over Rs 50 billion so far. A similar impact of another Rs 15 billion revenue deficit was noted due to a reduction in prices. With the further decline, the FBR has estimated Rs 75 billion revenue shortfall from the oil sector alone by end-June.

The revenue target has been revised downwards to Rs3.908 trillion from the initial budgetary projection of Rs5.503 trillion. However, independent tax circles are of the view that the FBR would hardly be able to touch the target due to a negative impact of Coronavirus.

The number of corona cases in Pakistan has multiplied to 67,000 as over 2,400 cases were reported in 24 hours. So far, over 1400 deaths have been reported throughout Pakistan and Prime Minister Imran Khan is due to hold an important meeting on Monday (June 1) to review and decide resumption of economic activities in the country.

The FBR sources said achieving the revised target would become further difficult in case the federal government opts to continue lockdown for another month. They said the consumption of oil has already dropped bt 35-50 percent due to the lockdown.

Also, the FBR has released Rs175 billion refunds between July 1, 2019, and April 15, against Rs 107 billion paid over the corresponding period of last year, an increase of 64 percent. Besides these refunds, Prime Minister Imran Khan has also announced Rs 100 billion package for exporters. Of this, Rs 70 billion was for the FBR and the rest were put at the disposal of commerce ministry to pay drawback of local taxes and levies.

A breakdown of these refunds shows the FBR released almost Rs 100 billion in sales tax against Rs 21 billion last year, up over 350 percent.

Copyright Business Recorder, 2020