Chapter # 03

Analysis And Findings

Chapter # 03

ANALYSIS AND FINDINGS

3.1 DATA ANALYSIS
Table -3.1
A Comparison of Collection from 2003 to 2011
Tax head

Types of tax
FY, Collection in (billion)
2003-2004

04-05

05-06

06-07

07-08

08-09

09-010

010-011

183.1

318

333.7

387.5

443.6

528.6

917.9

Income tax
165.1

Sale tax
219.2

240.0

311

45.6

52.9

72

309.4
71.7

376.9
92.2

451.7
117.5

517.3
121.2

552.5
119.6

429.9

476

701

714.8

856.6

1012.8

1167.1

1414.9

Federal excise
duty

Total tax

Source: FBR annual reports

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Analysis And Findings

From the above table we do the following analysis,

Revenue Collection in FY: 03-04 vis--vis FY: 0405
A comparison of net collection for FY 04-05 and FY 03-04 confirms a healthy
growth of 13.5% in federal receipts. In fact, an increase of Rs. 70.2 billion over last year
has been the largest in a single year since FY 47-48. This increase (in absolute terms)
exceeds the previously recorded highest collection of Rs. 61 billion of FY 03-04 by about
15%.
It is relevant to mention that while the growth of the federal tax receipts has been
substantial in absolute terms, it has lagged behind the (nominal) growth of the GDP and
thereby the CBR Revenue to GDP ratio has declined from 9.4 in FY 03-04 to 9 in FY 0405.

Revenue Collection in 2006-07 vis--vis 2005-06

The gross and net collection during 2006-07 has been Rs.929.4 billion and Rs.
847.2 billion, showing an increase of 16.4% and 18.8%, respectively over 2005-06. In
the process of crossing the Rs. 800 billion threshold

Revenue Collection in FY: 07-08 vis 06-07

A comparison of net collection for FY: 07-08 and FY: 06-07 confirms a healthy
growth of 18.9% in federal receipts (Table 2). In fact, an increase of Rs. 160 billion
over last year collection has been the largest in the history of Pakistan.
This increase (in absolute terms) exceeds the previously recorded highest
collection of Rs. 134 billion during FY: 06-07. The performance of all the taxes has
been vibrant ; federal excise registering a robust growth of 28.4% followed by sales tax
21.8%. The direct taxes and customs duty have also recorded healthy growths of 16.1%
and 13.8% respectively.
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Analysis And Findings

Revenue Collection in FY: 08-09 vis 07-08

Based upon the past performance and expecting the buoyant stance, the budgetary
target for FY: 08-09 has been set at Rs. 1,250 billion, requiring an increase of 24.1 % over
the provisional collection of Rs. 1007.2 billion of FY: 07-08.
The projection for FY: 08-09 reflects tax mix of individual taxes: DT 39.9%, GST 37.7%,
FED 9%, and CD13.5%.

Revenue Collection in FY: 08-09 vis 07-08

Based upon the past performance and expecting the buoyant

stance, the

budgetary target for FY: 08-09 has been set at Rs. 1,250 billion, requiring an
increase of 24.1 % over the provisional collection of Rs. 1007.2 billion of FY:
07-08.
The projection for FY: 08-09 reflects tax mix of individual taxes: DT 39.9%, GST 37.7%,
FED 9%, and CD13.5%.

Revenue Collection in FY: 09-010 vis 010-011

FBR revenue target for the FY: 2009-10 was fixed at Rs. 1,380 billion at the time of
announcement of Federal Budget. The target was linked with expected growth in GDP,
the rate of inflation, tax buoyancy and other key economic indicators such as growth in
the Large Scale Manufacturing sector and imports.

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Chapter # 03
Analysis And Findings

3.2: FINDINGS:
From above data analysis I found the following results,

FBR has made e-filling mandatory where a taxpayer has to file its return online to
respective Regional tax offices within specific period of time, so a taxpayer hasnt
to visit the building physically and job become easy and time saving

for a

taxpayer, therefore FBR improves to cover the tax revenue target.

First thing that affects the FBR performance is the natural calamities and disasters
that paralyze the economy of the country and so the FBR Collections get decrease
and such areas become exempted from tax for a couple of years which hits the
Taxation system seriously and depleted the collections of FBR.
To control such serious errors, policies regarding reforms are adopted incessantly
and reforms are comprises of motivation concept inside the organization,
application of modern technology, employees training and development.
Making Taxpayer Facilitation Portal/Center modern where taxpayers easily can get
information about taxation system, policies, tax rules and regulations, NTN and
STRN etc, all these can be done also online. FBR Online site also makes all
taxpayer inform of updates.
Two additional achievements during 2006-07 are the enhancement of direct tax
base and the completion of the process of re-organization of field offices on
functional lines. With 20% increase in tax base, the number of NTN holders has
jumped from 2.1 million to 2.52 (Federal board of revenue annual report 200607)million during the last two years.
Government of Pakistan given 3 years exemption for flood affected areas, which in
result in decrease tax Revenue on side while other side it is a chance for tax payers to
improve their ability to pay taxes.
Under and over-invoicing is an international phenomenon. The complexity in
technical calculation and the delicacy of it usually leads to tax evasion. In
order to curb this menace, FBR

has established the Valuation Wing so that

assessment of the imports is carried out on scientific lines all across the country.
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Chapter # 03
Analysis And Findings
The introduction of Universal Self-Assessment Scheme as well as re-organization
under Tax Administration Reform Programme on functional lines has opened new
areas for improvement but not without challenges. The doctrine of voluntary
compliance by the taxpayers has definitely placed the tax authorities under a lot of
pressure to prove their professional worth.
FBR has launched a double pay-package (double BPS; basic pay scale) as a reform
and it is said that it has decreased the corruption.
In FBR there is no strict enforcement of laws.
In FBR there is a concept of Job Rotation which is a kind of training which helps to
get more skills and opportunities of career development and here the rotation is
annually.
Almost 90% of FBR contribution in overall Government revenues,(Questionnaire
filling from staff members of FBR(RTO) Peshawar).
Most of tax revenue collects FBR from income tax head.
FBR fails in proper revenue collection due to corruption, energy shortage, weak
political situation and inefficiency of FBR.
Each year the target is much above from previous year collection that is why FBR
dont collect according to the target.
Due to weak documentation by FBR the actual collection is not according to the
target.

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Chapter # 03
Analysis And Findings

References:
Khan, Insp.Azam (2012, Aguest 24). tax collection procedure. (Sanaullah,
Interviewer)

Alam, J. (2011). Analysis of fbr. lahore: Busniess magazine week.

Annual report of Federal board of revenue ,RTO Peshawar,FY2010-011.

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