ISLAMABAD: The Federal Board of Revenue (FBR) is all set to exceed the upward revised target by June 30 as it already collected a record over Rs6 trillion so far in the outgoing fiscal year, posting a growth of 29 per cent over the Rs4.65tr collection in FY21, showed provisional data released on Tuesday.
The PTI government had revised upward the revenue target to Rs6.1tr to keep the budget deficit at a committed place. While preparing the budget for the outgoing fiscal year, the previous government had assured the IMF of raising Rs5.829tr against Rs4.721tr collected in FY21.
FBR official spokesperson Asad Tahir said in the next two days the remaining amount will be collected to exceed the Rs6.1tr target. “We will achieve our annual target,” he further said in a statement, which he termed a historical revenue collection.
The provisional figures will further improve after the closure of payment receipts and reconciliation with the State Bank of Pakistan.
Tarin lauds tax authorities for their impressive performance
No official comments were released from the prime minister as well as the finance minister’s offices over the FBR of record revenue collection. However, former finance minister Shaukat Tarin took to Twitter to extend his appreciation for the performance of the FBR. “Well done FBR”, Mr Tarin tweeted.
“This was possible due to the strong economic growth and progressive tax policies of former Prime Minister Imran Khan,” he remarked. Mr Tarin further said that now let’s not go back to regressive tax policies of taxing the already taxed and overtaxing the productive sectors of the economy.
Unprecedented in the FBR’s history to consecutively surpass the monthly collection targets in the first eight months (July to February) of 2021-22. However, the collection slowed down since March when the PTI government reduced taxes to zero on petroleum products. As a result, FBR projected a revenue loss of Rs182bn on annual basis because of the zero taxes on petroleum products.
Major growth in revenue collection is at the import stage — customs duty, sales tax, withholding tax — mainly because of the unprecedented growth in imports in FY22.
The gross collection, including refunds and rebate payments, increased by 28.6pc from Rs4.898tr during July-June FY21 to Rs6.306tr in FY22.
An amount of Rs306bn was refunded in FY22 compared to Rs248bn paid last year, an increase of 23.38pc. This is reflective of FBR’s resolve to fast-track refunds to prevent liquidity shortages in the industry.
With the surging import bill coupled with the rising arrival of smuggling-prone items through legal channels, customs duty collection stood at Rs974bn in FY22 as against Rs734bn last year, indicating an increase of 33pc. The annual customs collection target of Rs960bn has been surpassed even though no policy measures have been taken so far. This excessive revenue collection from customs has helped the tax authorities to cover up slight shortfalls from their respective annual targets in income tax, sales tax and federal excise duty.
The income tax collection in FY22 stood at Rs2.19tr as against Rs1.67tr over the same period last year, indicating a growth of 31pc. Very nominal IT refunds were paid during the FY22 as it stood at Rs14bn this year against Rs17bn last year. The income tax collection target was projected at Rs2.227tr which was missed in FY22.
Meanwhile, the sales tax collection jumped to Rs2.515tr from Rs1.963tr in the same period last year, showing a growth of 28pc. The growth came as a result of the highest-ever rise in fuel prices, increase in imports and revival of economic activities during the period under review.
The sales tax target was projected at Rs2.576tr which was also missed slightly during the period under review.
The Federal Excise Duty collection was up 13pc to Rs320bn in FY22 as against Rs283bn in the corresponding period last year. However, the collection fell short of the target by Rs17bn.
Published in Dawn, June 29th, 2022