ISLAMABAD: In a positive surprise, the Federal Board of Revenue (FBR) has surpassed its assigned tax collection target with a margin of Rs57 billion in first month (July 2020) of the current fiscal year.
Against the assigned target of Rs 243 billion for July 2020, the FBR has collected Rs300 billion during the first month of the current fiscal year.
However, independent tax experts are saying that the FBR required collection of Rs 400 billion per month in order to achieve the desired tax collection target of Rs4,963 billion for the ongoing fiscal year and less than that collection might trigger policy changes for imposition of more taxes in months ahead.
So far, the FBR has kick-started with good performance because the imports are picking up and Eid shopping also played positive role for surpassing the assigned target with good margin. It is yet to be seen how much the FBR sustained this momentum in months ahead because it would depend upon the performance of the FBR for reviving the stalled IMF programme.
According to the FBR’s announcement made on Thursday night, the FBR has performed remarkably well during first month of the current financial year i.e. July 2020. Against the assigned revenue target of Rs243 billion, FBR has collected Rs300 billion overshooting the target by a staggering Rs57 billion, which is 125 percent of the assigned revenue target.
The Inland Revenue overshot the target by Rs52 billion, whereas the Customs Wing exceeded the target by Rs5 billion. It is worth mentioning that in July 2019, net collection of Inland Revenue remained at Rs236 billion.
This growth has been achieved despite economic conditions caused by COVID-19 during which the country mostly remained in lockdown state. The revenue trajectory also beat the adverse impact of government’s import compression policy.
To redress the hardships of the business community caused by COVID-19, an unprecedented amount of refunds to the tune of Rs15 billion have been disbursed during July 2020, as compared to refunds of Rs7 billion during July 2019.
Sales Tax refunds are being issued under centralised and automated system called Faster which is clearing refunds to exporters within 72 hours for the first time as committed by the government in July 2020. This has facilitated the exporters and the industry easing off their liquidity crunch.
The FBR is also engaging with trade and industry to mitigate their genuine grievances. The FBR is proactively reaching out to trade and industry and resolving their issues.
