FBR collects Rs458bn in July, exceeds target by Rs15bn

ISLAMABAD: The Federal Board of Revenue (FBR) on Sunday released the provisional revenue collection figures of Rs458 billion for the month of July, 2022.

According to the provisional information, the FBR has collected net revenue of Rs458 billion during July 2022, which has exceeded the target of Rs443 billion by Rs15 billion. This represents a growth of about 10 percent over the collection of Rs417 billion during the same period, last year.

The figures would further improve after book adjustments have been taken into account. These collections are the highest ever in the month of July. This outstanding revenue performance is a reflection of the FBR’s continued resolve to build further on its growth trajectory achieved during the last year.

On the other hand, the gross collection increased from Rs438 billion during July last year to Rs486 billion, showing an increase of 11 percent. Likewise, the amount of refunds disbursed during July was Rs28 billion compared to Rs21 billion paid last year, showing an increase of 32 percent. This is reflective of the FBR’s strong commitment to fast-tracking refunds and thereby preventing liquidity shortages in the industry.

The significant revenue increase in July is largely the outcome of various policy and revenue measures introduced by the government in the Finance Act 2022. Unlike in the past, there is a visible focus on taxing the rich and affluent. Owing to the paradigm shift, the domestic taxes contributed 55 percent in collection, while import taxes remained 45 percent. This has reversed the trend.

Previously, the taxes at import stage were 52-53 percent of overall collection. Likewise, the growth in domestic Income Tax is almost 31 percent, which is a remarkable shift towards the direct taxation. Likewise, there is a significant upsurge in the Advance Tax collected during July. There is also 118 percent increase in the Advance Tax on the sale of properties u/s 236-C due to enabling of a withholding provision applicable irrespective of the holding period. Likewise, 40 percent increase in Advance Tax u/s 147, especially from the banking companies is due to change in the tax rate.

Similarly, increase in the rate of FED on cigarettes/tobacco has paid its dividends. The FED from tobacco has registered a record growth of over 47 percent or Rs2.6 billion and the corresponding increase in Sales Tax from the Tobacco Sector has registered a record 67 percent growth.

The increased FED on the international air travel has also registered growth of over 200 percent. Furthermore, Pakistan Customs has collected Rs67 billion under the head of customs duty during July 2022 against Rs65 billion collected during the same period last year, registering a marginal growth of 2.58 percent. However, it suffered a dip against the target fixed for July of Rs77 billion, which is due to import compression policy of the government, aiming to control the outflow of USD. Furthermore, the FBR suffered a loss of about Rs11 billion in Sales Tax against zero rating of the POL products.

It is pertinent to mention that Income Tax Returns for Tax Year-2021 have reached 3.4 million compared to 3.0 million in Tax Year-2020, showing an increase of 13 percent. The tax deposited with returns during the Tax Year 2021 was Rs76 billion compared to only Rs52 billion in the Tax Year 2020, showing a significant increase of 46 percent. Furthermore, building further on its ongoing drive to integrate Tier-1 Retailers across the country, around 23,265 point of sale terminals have been integrated with real time POS reporting system of the FBR.