Government mulls austerity plan after Eid
By: Imran Ali Kundi
ISLAMABAD – Apart from introducing austerity plan, the government is seriously contemplating several options of revenue generation including imposition of new taxes, increasing tax rates, and administrative reforms in order to meet the tax collection target of Rs 1952 billion set for the ongoing fiscal year after the figures-fudging episode of the Federal Board of Revenue (FBR).
Â“Yes, the government is working to find ways how to reach the revenue collection target of Rs 1952 billion set for the current year 2011-2012 after the figures fudging of the revenue collection of the previous year. Due to the figures fudging the base of Rs 1952 billion has been changed, therefore, we have to determine new ways to reach the target”, said Secretary Finance Dr Waqar Masood Khan while talking to TheNation here on Monday. The revenue collection target would not be changed, he said and added that the government would find new ways to reach it.
It might be mentioned here that the government has fixed the tax collection of Rs 1952 billion on the basis of Rs 1588 billion. However, as the FBR has faced a shortfall of Rs 38 billion it achieved Rs 1550 billion. Therefore to fulfil the shortfall of Rs 38 billion, the government is considering several options.
Dr Khan admitted that the government is working on austerity plan and all these would be announced in a press conference after Eid-ul-fitr. According to the reports, the government is working on the austerity plan wherein there would be ban on the new recruitments in the public sector.
Meanwhile, in the austerity plan, the government could also impose ban on the purchase of physical assets for the government offices.
On the other hand, the sources told TheNation that the government is working to revise all its economic targets for the current fiscal year, as FBR had failed to achieve the revenue collection target of Rs 1588b set for the previous year. The government has fixed its economic targets for the current year on the basis of Rs 1588 billion, however as the tax department failed to reach the target, therefore, the government has to revise its entire targets, the sources added.
According to the sources, the government is seriously contemplating to devise a new strategy to reduce the expenditures and to increase the revenue in order to keep fiscal deficit at four per cent of the GDP.
The government is considering few options to increase the revenue collection by imposing new taxes, enhancing the tax rate and to focus on the administrative reforms during the ongoing financial year, the sources added.
It is worth mentioning here Chairman Federal Board of Revenue Salman Siddique on June 30 had announced that FBR exceeded the annual tax collection target of Rs 1588 billion, as it achieved Rs 1590 billion. However, later on July 22, the FBR chief had revealed that tax department collected only Rs 1550 billion during the previous fiscal year.
Source: The Nation