ISLAMABAD: The tax authorities collected Rs669 billion in the second month of the current fiscal year, exceeding the target of Rs649bn by Rs20bn, according to provisional data released by the Federal Board of Revenue (FBR) on Thursday.

The revenue collection in August rose to Rs669bn, an increase of 35pc from last year’s Rs494bn as inflation soared to record levels due to high energy costs.

The sales tax refund issued in August stood at Rs42bn against Rs38bn over the corresponding month of last year, indicating a growth of just Rs8bn.

An official of the FBR said that the target for the second consecutive month along with other structural and indicative benchmarks of Standby Arrangement were also met. “We will achieve our annual target”, the official further said.

In the first two months, the FBR collected Rs1,207bn against the target of Rs1,183bn, surpassing the target by Rs24bn. The revenue collection grew 28.25pc when compared with last year’s collection of Rs956bn.

The government has projected a revenue collection target of Rs9.415tr for FY24 as against the revised collection of Rs7.2tr in FY23, showing an increase of Rs2.219tr or 30pc.

Tax-wise break up showed that FBR collected Rs488bn under the head of Income tax compared to Rs347bn in the same period, indicating a growth of 41pc.

A growth of 16pc was achieved in the collection of sales tax with collection surpassing Rs473bn as against Rs407bn in the same months last year. This growth seems very negligible when compared with the quantum of inflation. This did not reflect the true potential.

The federal excise duty recorded a 57pc increase on a year-on-year to almost Rs80bn.

On the imports side, the customs duty collection stood at Rs166bn in July-August against Rs151bn over the same months last year, indicating a growth of 10pc. The growth momentum was not maintained in customs collection due to compression in imports.

The government hopes to achieve the target based on the projected economic growth of 3.5pc, average inflation of 21pc and some revenue measures. The autonomous growth in revenue — to come from GDP growth and inflation — is projected at Rs1.76tr in 2023-24.

In FY23, the FBR missed its annual budgetary collection target by almost Rs522bn, or 8.83pc, owing to a steep decline in dutiable imports as well as poor general sales tax performance. The revenue collection reached Rs7.118tr until June 27 as against Rs7.64tr projected for FY23.

The official said that the real impact of revenue collection at the import stage will come in the next couple of months.

Published in Dawn, September 1st, 2023