FBR expects Rs130b tax collection deficit, mini-budget required

ISLAMABAD: The Federal Board of Revenue (FBR) is expecting a tax collection shortfall of Rs130 billion for the current fiscal year.

This will necessitate the introduction of a mini-budget to bridge the gap.

Read more: Petrol, diesel prices slightly go up in Pakistan

The news comes amid a recent increase in petrol and diesel prices.

According to sources, the FBR stated that it must achieve a tax collection target of Rs980 billion by December. However, as of now, only Rs775 billion have been collected in the initial four months of the current fiscal year.

Such a huge gap can jeopardise Pakistan’s ability to receive the next installment of financial handout from the International Monetary Fund (IMF).

The IMF has granted several bailouts and financial assistance to the inflation-hit Pakistan; however, at a huge cost.

The macroeconomic framework established in cooperation with the global financial institute has encountered difficulties for the cash-strapped Pakistan, with the FBR struggling to meet its revenue goals.

The FBR, therefore, launched the “Advanced Stock Register System, following directives from the department’s chairman.

The new system aims to improve the efficiency and accuracy of tax collection by granting tax officers comprehensive access to the date of registered citizens.

The implementation of the system is expected to facilitate more precise tax estimation and compliance, as it establishes a centralized data ‘ecosystem’.

Read more: Circulating money supply jumps 15.1 per cent YoY to Rs39.89 trillion

The FBR stated that the new tax system will be critical in ensuring compliance with tax regulations, and thereby, improve overall tax collection.