The Federal Chairman (FBR) Rashid Mahmoud Langeral attributed the revenue deficit in the first half of the fiscal year 25 to an independent growth less than expected, driven by the stability of the exchange rate, subjugation inflation, and the intelligence of the slow GDP and the manufacturing sector.
The Senate Standing Committee reported that these factors have greatly affected the collection of taxes, which led to a shortage of 384 billion rupees between July and December 2024.
This deficiency is expected to rise that this deficiency may rise to 447 billion rupees by February 2025, although he expressed optimism that the growth of revenue will accelerate in the last four months of the fiscal year, which reduces more losses.
Politics measures presented in the Finance Law 2024, which were expected to generate 1.3 trillion rupee, also resulted in groups less than expected, mainly due to behavioral changes between real estate investors and merchants, as well as appreciation errors.
In the first half of 2024-25, the loss of revenue due to policy measures alone reached 251 billion rupees, with expectations that it may reach 539 billion rupees unless corrective measures are taken.
The committee was aware that FBR collected 5,624 billion rupees of taxes during the first half of the fiscal year, as it decreased from the target of 6,008 billion rupees.
Despite the deficiency, the tax rate has improved to GDP, increasing from 9.5 percent in the first quarter to 10.8 percent in the second quarter. However, it remains less than the goal of the International Monetary Fund of 13.6 percent by the end of the program.
Relatively, the tax rate to GDP in India is 18 percent. The number of registered retailers from 200,000 increased last year to 600,000 this year, while tax payments increased with income tax decisions to 105 billion rupees.
During the meeting, the Senator Mandviola criticized the FBR frequency of expanding the collection of sales tax, noting that despite the multiple recommendations, the tax authority opposed the collection of sales tax on goods.
However, Langrial stressed that FBR’s efforts to reinforcement have been reflected in increasing the tax rate to gross domestic product and continuous policy amendments.
