Rs386 bn collection: FBR registers historic growth in May

ISLAMABAD: The Federal Board of Revenue (FBR) has collected Rs4,170 billion in the first 11 months of the current fiscal year. The FBR on Tuesday released the provisional revenue collection figures for the first 11 months of the current fiscal year.

According to the provisional information, the FBR has collected net revenue of Rs4,170 billion during July-May period, which has exceeded the target of Rs3,994 billion by Rs176 billion.

This represents a growth of about 18pc over the collection of Rs3,549 billion during the same period last year. The net collection for the month of May was Rs386 billion, against a required increase of Rs214 billion, representing an increase of 69pc over Rs229 billion collected in May 2020 and 168pc of the target.

The year-on-year growth of 69pc is unprecedented particularly as it is realized on the heel of 57pc in April. These figures would further improve before the close of the day and after book adjustments have been taken into account.

On the other hand, the gross collections increased from Rs3,674 billion during this period last year to Rs4,386 billion, showing an increase of 19.4pc. The amount of refunds disbursed was Rs216 billion compared to Rs125 billion paid last year, showing an increase of 42.3pc.

This is reflective of the FBR’s resolve to fast-track refunds to prevent liquidity shortages in the industry. The improved revenue performance is a reflection of growing economic activities in the country despite facing the challenge of third wave of Covid-19.

However, during the Eid holidays, revenue collection slowed down considerably. Meanwhile, the FBR’s efforts to broaden the tax base are expanding apace. Early signs suggest such efforts are bearing fruit. As on 31-5-2021, income tax returns for the tax year 2020 have reached 2.93 million compared to 2.63 million in tax year 2019, showing an increase of 11.4pc. The tax deposited with returns was Rs52 billion compared to only Rs34 billion last year, showing an increase of 55pc.

The FBR has also released the information about Tier-I retailers who have been integrated with the POS system. According to the information, 10,767 sales points have been integrated with Point of Sales Linked Invoicing System.

The Pakistan Customs has collected Rs672 billion under the head of customs duty in the first 11 months of FY 2020-21 against the assigned target of Rs565 billion and exceeded its target by Rs107 billion, which is 19pc more than the assigned target. Whereas during the month of May, 2021, an amount of Rs64 billion has been collected under the head of customs duty against the monthly target of Rs57 billion, which is again 12pc more than the assigned monthly target. It is quite important to mention that an amount of Rs107 billion was collected more under the head of customs duty in the first 11 months of the current financial year as compared to FY 2019-20, despite the re-arrival of Covid-19 pandemic, showing a growth of 19pc as compared to the previous financial year, which is quite remarkable.

During May 2021, smuggled goods worth Rs2.6 billion have been seized so far, while in May 2020 smuggled goods worth Rs1.5 billion were seized, thus showing a monthly increase of 74pc. Similarly, during the last 11 months (July 2020- May 2021) of current financial year, smuggled goods worth Rs52.5 billion have been seized as compared to Rs40.8 billion in July 2019-May 2020 of the last financial year, thus, showing an increase of 29pc.

Due to effective enforcement measures taken by the Inland Revenue (IR) and Customs, additional revenue of Rs175 billion was collected in the current Financial Year out of which Inland Revenue (IR) has added around Rs100 billion. IR enforcement measures include recovery out of arrears, efficient audits, improved monitoring of sales tax, POS integration, broadening of tax base and monitoring of withholding taxes. Similarly, out of Rs175 billion, the remaining additional Rs75 billion have come from effective enforcement measures taken by the Pakistan Customs.

These measures include counter smuggling operations regarding tea, tyres, textiles, electronics, palm oil and POL. Besides enforcement measures, effective administrative measures like the auction of goods, control measures against under invoicing, adjudication of court cases, recovery of arrears, DIRBS and audits have also increased the revenue generation.

During the current Financial Year from July to May, the major sectors for the collection of revenue included auto sector, banks, cement, POL, tobacco and sugar. Tax revenue of Rs108 billion was collected from the auto sector so far, which was Rs72 billion in the last year, showing growth of 51 percent. Likewise, revenue of Rs117 billion was collected from the banks in the current year, which was Rs87 billion last year, exhibiting an increase of 34 percent. The FBR has collected Rs127 billion from the cement sector in the first 11 months, which was Rs97 billion last year, showing an increase of 31 percent.

The revenue collected from the POL is Rs577 billion, which was Rs516 billion last year, showing an increase of 12 percent. From the tobacco sector, the FBR has collected Rs129 billion revenue, which was Rs104 billion last year, thus showing an increase of 24 percent. The revenue from sugar sector was Rs53 billion, which was Rs31 billion last year, showing a growth of 74 percent.

The Customs duty collections in the current year from the major items include vehicles, iron steel and machinery and mechanical appliances. Customs duty of Rs98 billion was collected from vehicles, which was Rs52 billion last year, showing an increase of 86 percent. Customs duty from iron and steel was at Rs53 billion, which was Rs42 billion last year, showing a growth of 24 percent.

Similarly, Customs duty from machinery and mechanical appliances was Rs38 billion, which was Rs30 billion last year in the same period, thus showing a growth of 26 percent.

The Directorate General of Intelligence & Investigation-IR showed commendable performance during July 2020 to May 2021. During this period, Directorate General forwarded 1,491 Investigation Reports and Red Alerts to the field formations involving revenue amounting to Rs228 billion.

During the period October 2018 to May 2021, Directorate General filed 146 complaints under the Anti-Money Laundering Act, 2010 where more than Rs52 billion were involved. The Directorate General seized 7,527 cartons containing 75,270,000 cigarette sticks during the period of July 2020 to May 2021.