ISLAMABAD: The Federal Board of Revenue (FBR) has faced a tax shortfall of Rs129 billion during the first four months (July-October) of the current fiscal year, despite recording a 7% increase in collections compared to the corresponding period last year.
According to sources, the FBR collected Rs4,088.2 billion in taxes during July-October against the target of Rs4,217 billion, leaving a shortfall of Rs128.8 billion.
The revenue shortfall has added to the challenges facing the tax authority as it strives to achieve the annual collection target of Rs15,264 billion by June 2027. Officials said the FBR would need to maintain a growth rate of 17% to meet the annual target.
During October, the FBR collected Rs1,002 billion in taxes, while collections increased by Rs27 billion on the last day of the month, October 31. The tax authority also received 7.6 million income tax returns by the end of October.
Meanwhile, the government’s fixed-tax scheme for retailers has failed to attract a significant number of participants, raising questions about its effectiveness in broadening the tax base.
According to officials, only 1,750 retailers registered under the scheme out of an estimated 3.6 million potential non-filer retailers, while just 220 new taxpayers filed income tax returns.
The FBR had set a target of collecting Rs50 billion in taxes through the retailers’ scheme.
In a move to bring non-filers into the tax net, the FBR has also decided to impose escalating monthly penalties on retailers who fail to comply with tax registration requirements.
Under the proposed penalty structure, non-filers may face a fine of Rs10,000 in the first month, Rs25,000 in the second month and Rs50,000 in the third month.
The FBR also has the authority to seal business premises of retailers who remain outside the tax net, as part of its enforcement measures to expand the country’s narrow tax base.