ISLAMABAD: The Federal Board of Revenue (FBR) achieved the collection target of Rs527 billion set for February, a growth of nearly 19 per cent over the same month last year, showed provisional data released on Tuesday.
However, the collection fell short by Rs214bn or 4.54pc to Rs4.492 trillion against the target of Rs4.706tr in the first eight months of 2022-23. The tax authorities recorded a 17.9pc growth over Rs3.810tr collected in July-Feburary 2021-22.
FBR expects a few more billion when revenue collection is finalised.
The growth is much below what the government had committed to the International Monetary Fund to achieve the projected target of Rs7.47tr for FY23.
On Feb 14, the FBR raised the sales tax rate from 17pc to 18pc but the impact of this hike had yet not been computed for the last 14 days. Similarly, the excise duty on cigarettes also increased significantly. The revenue projection in three and half months from these two measures is estimated at Rs115bn.
Records a shortfall of Rs214bn in July-February
At the same time, the Supreme Court on Feb 7 also ordered big taxpayers to deposit 50pc of their super tax with the federal board of revenue.
According to an official source, all these measures helped FBR to achieve its revenue collection target for February. The target is lower because of a shorter month, the official added.
The tax authorities have anticipated that the massive rupee depreciation along with Rs170bn revenue measures and collection of super tax from large taxpayers in the next few months would bridge the shortfalls.
According to tax officials, the maximum collection is made under the head of income tax. One of the major reasons is the collection of the super tax in February. However, the collection of income tax is still behind the projected target in 8MFY23.
The official believed that it will be bridged in the coming months owing to the full collection of all other budgetary revenue measures. However, FBR withheld the income tax refunds because nearly Rs12bn refunds were paid in the 8MFY23.
The collection of sales tax is far behind the projected target for the eight months. However, a paltry growth was recorded when compared with the same collection of last year. The domestic sales tax collection did not perform well despite unprecedented inflation.
Published in Dawn, March 1st, 2023
