ISLAMABAD: The tax authorities collected Rs2.041 trillion in the first quarter of the current fiscal year exceeding the target of Rs1.977tr by Rs64bn or 3.23 per cent, according to provisional data released by the Federal Board of Revenue (FBR) on Saturday.

The revenue collection in the first quarter (July to September) FY24 rose to Rs2.041tr, an increase of 24.17pc from last year’s Rs1.643tr as inflation soared to record levels due to high energy costs.

The revenue collection in September surpassed the target by Rs35bn to Rs834bn against a projected monthly target of Rs799bn. The revenue collection increased by 21.15pc to Rs834bn when compared with Rs685bn over the corresponding month of last year.

These figures would further improve before the close of the day and after book adjustments have been taken into account.

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.

The total refunds/rebate paid to taxpayers stood at Rs128.13bn in the first quarter as against Rs84.28bn over the corresponding months of last year, indicating a growth of 52pc.

Of these, the sales tax refunds stood at Rs106.56bn in the first quarter FY24 against Rs71.86bn over the last year, an increase of 48pc.

An official announcement of the FBR said severe import compression was witnessed during September as the collection of taxes dipped to Rs254bn from Rs299bn in August. The FBR, however, was able to make up the shortfall of Rs45bn through domestic taxes, especially direct taxes.

Tax-wise break up showed that the FBR collected Rs934.48bn under the head of income tax compared to Rs688.31bn in the same period last year, a growth of 35.76pc. The income tax refunds paid to taxpayers stood at Rs12.74bn in the quarter under review against Rs4.61bn in the corresponding period last year.

A growth of 12.74pc was achieved in the collection of sales tax with collection stood at Rs726.86bn as against Rs644.71bn in the same quarter 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 61.25pc increase on a year-on-year to almost Rs127.58bn as against Rs79.12bn over the corresponding months of last year.

On the imports side, the customs duty collection stood at Rs252.17bn in July-Sept FY24 against Rs231.62bn over the same months last year, indicating a growth of 8.87pc. The customs duty collection registered growth despite import compression and the strengthening of the rupee.

The customs rebate paid in the quarter stood at Rs8.82bn as against Rs7.79bn over the corresponding months of last year.

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.

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, October 1st, 2023