ISLAMABAD: Pakistan’s top tax machinery collected Rs4.721 trillion in the outgoing fiscal year exceeding the revised target of Rs4.691tr by Rs30 billion, showed provisional data released by the Federal Board of Revenue (FBR) on Wednesday.
A few more billions will be added when revenue collection from book adjustments and others is cleared in the next couple of days.
For 2021-22, the government has projected revenue collection target for the FBR at Rs5.829tr as against Rs4.691tr revised target for FY21.
Among the federal taxes, the income tax (IT) collection fell short of target by Rs137bn, followed by Rs25bn in Federal Excise Duty (FED) in the outgoing fiscal year. However, the sales tax (ST) collection surpassed the annual target by Rs317bn owing to nearly double-digit inflation and higher petroleum prices.
Fails to increase income tax, FED collection in 2020-21
With the rising import bill coupled with an increase in imports of smuggling-prone items the customs duty collection also surpassed the annual target by Rs125bn.
The overall budgetary revenue collection target for the FBR was projected at Rs4.963tr for 2020-21, which was revised down to Rs4.697tr owing to lockdown and partial closures of businesses. As a result, the revenue shortfall so far recorded at Rs242bn when compared with the budgetary revenue target.
Comparing with the revenue collection of Rs4tr in 2019-20, the revenue collection posted 18pc growth in the outgoing FY21.
On a monthly basis, the revenue collection in June fell short of target by Rs140bn to Rs557bn this year against the target of Rs697bn over the corresponding month of last year. Compared to the collection of Rs451bn in June 2020, revenue collection posted growth of 24pc.
In the past three months -- March to April -- the revenue collection surpassed the projected monthly target. It was mainly because of the low base of last year.
Pakistan saw the imposition of lockdown from mid-March 2020 owing to the Covid-19 pandemic which led to lesser collection during the last year’s monthly collections in March 2020 and onwards.
The gross revenue collection including refunds reached Rs4.971tr as against Rs4.135tr over the corresponding months last year, showing an increase of 20pc. So the gross revenue collection has crossed the budgetary revenue target for the outgoing fiscal year.
To facilitate exporters, the amount of refunds disbursed this year were Rs251bn compared to Rs136bn paid last year, showing an increase of 85pc. The government has done away with the zero-rated regime and introduced automated payments of refunds to resolve the cash issues of exporters.
The IT collection during the outgoing fiscal year stood at Rs1.734tr as against the target of Rs1.871tr, showing a shortfall of about Rs137bn. Its collection, however, showed growth of 12pc when compared with Rs1.550tr collected during the same period last year. In June, IT collection also fell short of target by Rs107bn.
Meanwhile, the sales tax collection jumped 29pc to Rs2.189tr in the FY21 from Rs1.692tr in the same period last year. The target was projected at Rs1.872tr and it was surpassed by Rs317bn. The growth came as a result of a rise in fuel prices, increase in imports and revival of economic activities during the period under review.
So nearly the double-digit inflation has helped the FBR to collect maximum sales tax collection on consumption.
The FED collections were up 10pc to Rs284bn as against Rs258bn last year. The FED target for July-June FY21 was set at Rs309bn, which was missed by Rs25bn.
Customs collection stood at Rs765bn during the outgoing fiscal year as against Rs636bn over the last year, indicating a growth of 20pc. The target projected under customs was Rs640bn for the period under review.
The maximum growth in customs revenue collection was noted owing to increase in imports of smuggled-prone items and a revival of industrial growth.
Published in Dawn, July 1st, 2021