KARACHI: The federal government has set an ambitious target for FBR including custom duty, sales tax collection at rupees 1,000,500,000 for the fiscal year 2019-20 with a projected required growth rate of 36 per cent vis a vis tax collected in previous fiscal year 2018-19.
The budget document shows that during the first 10 months of FY 2018-19, net Customs Duty collections was Rs.558.9 billion which was 17.4% higher than the duty collected during the corresponding period of FY 2017-18. As per budgeted and revised estimate the total collection by FBR stands at rupees 735,000,000.
The target set for new fiscal year is being termed irrational by the tax collectors, importers. exporter and experts. With US dollar gaining strength as Pak rupee losing ground, even more exports would make no difference in earning due to devaluation of Pakistani currency.
The importers are shying away after end of concessionary regime (SROs) which will now become a practice of past. The most significant step is assessment of levies on the basis of actual price. This would facilitate the importers while revenue of the state is likely to slide down along with customs officials would not be able to levy duty and taxes on higher side. The logical impact would be the less volume of revenue and hence as per experts, the target set for new fiscal year looks ambitious and irrational and may bring another embarrassment to the federal government.