FBR exceeds January tax collection target

ISLAMABAD: The Federal Board of Revenue (FBR) has so far collected Rs3,965 billion in tax collection in seven months (July-Jan) period and will have to collect Rs3,505 billion more in the remaining five months (Feb-June) of the current fiscal to meet the Rs7,470 billion target.

According to an FBR announcement, the tax machinery has surpassed the tax collection target envisaged for January 2023 with a margin of just Rs4 billion; its collection stood at Rs537 billion against the fixed target of Rs533 billion. However, it is relevant to mention here that the FBR faced revenue shortfall of Rs225 billion in December 2022 target.

It is argued by the FBR authorities that the December 2022 was wrongly fixed on the higher side and they would be able to collect the fixed target for Income Tax, Sales Tax and Federal Excise Duty (FED). However, it might face the shortfall of Rs170 billion on account of Customs Duty collection.

The latest estimates suggest that the devaluation of exchange rate will help the FBR overcome its expected shortfall in the current fiscal year.

According to the official statement issued by the FBR, the revenue collector has demonstrated performance during January 2023 and has not only achieved the monthly budgetary target of Rs533 billion but also surpassed it by Rs4 billion.

According to provisional figures, the FBR has collected Rs537 billion in the month of January, showing an impressive growth of 23 percent compared to the same month last year.

Cumulatively, the FBR has collected Rs3,965 billion in the first seven months of the current financial year against Rs3,367 billion collected in the corresponding period of the last year, depicting a growth of 18 percent. The third quarter of the current fiscal year started with an impressive performance and the FBR is committed to meeting the annual budgetary target of Rs7,470 billion for the current financial year despite economic challenges, said the statement.

Direct taxes collection has grown at a robust pace, which has shown growth of 48 percent during the first seven months of the current financial year, which is reflective of the government’s policy of shifting tax burden to wealthy and affluent segments of society.

It is also highlighted that the administrative and enforcement measures of the FBR have yielded the results, which is reflected in the growth of direct taxes in special and domestic taxes at large.

The growth in domestic taxes is 40 percent during the same period. The contribution of domestic taxes has also increased from 50 percent last year to 59 percent during the current year.

Furthermore, it is also significant that the collection from Customs Duty has shown an increase of 16 percent during the month of January as compared to the same month last year. Additionally, the FBR has not stopped short of taking care of exporters’ liquidity problems and has issued refunds of Rs208 billion during the first seven months of the current fiscal as against Rs183 billion during the corresponding period of last year, which is 14 percent more than the previous year’s issued refunds.

The statement said that the FBR appreciates all those taxpayers whose due contributions helped in achievement of the budgetary target and also lauds the endeavours of all field formations and its officers for their untiring efforts and commitment to optimise revenue collection in challenging economic situation. This growth in tax revenues, especially direct taxes, underscores the resolve of the government and the FBR to make Pakistan a prosperous nation to withstand financial shocks and bridge the fiscal deficit, the official statement concluded.