ISLAMABAD: The Federal Board of Revenue (FBR) has exceeded its December target by Rs7 billion due to the timely clearance of liquefied natural gas shipments as well as impressive domestic sales tax collection aided by historic inflation.

The revenue collection in December stood at Rs982bn against a projected target of Rs975bn. The revenue collection increased by 34pc when compared with Rs732bn over the corresponding month last year.

These figures would further improve by at least Rs1.5bn before the close of the month on Sunday and after book adjustments have been taken into account. Aside from the LNG cargoes cleared at the start of the week, the cargo cleared on Saturday resulted in a revenue collection of Rs3.7bn.

During the first half (July-December) of FY24, the FBR collected Rs4.467 trillion, exceeding the Rs4.425tr target by Rs42bn, according to provisional data released on Saturday.

Number of return filers plunges 35pc in 2023

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

A senior tax official said that the revenue collection’s better performance is mainly contributed by an impressive 37pc growth in income tax collection, followed by 28pc growth in domestic sales tax.

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

The revenue collection at the import stage has yet to pick up momentum because of the slowdown of imports. However, the FBR did not release the figures of sales tax refunds during the first half year.

Tax base broadening

The FBR received 3.6 million income tax returns in tax year 2023 as of Dec 31 compared to 5.5 million in tax year 2022, leaving a shortfall of 1.9 million.

As part of the tax compliance expansion, the FBR has sent e-notices to 8.195 million people who are on the tax rolls but did not file returns in tax years 2022 and 2023, respectively. The breakdown shows that e-notices were sent to 2.498 million non-filers in FY22 and 5.696m in FY23.

The tax authorities identified 839,856 people who did not exist on the tax roll as part of the effort to broaden the tax base. Notices were sent to all these people to file their returns.

According to a tax official, FBR has devised a plan to disconnect the cell phones of major taxpayers who are non-filers after including their names in the income tax general order (ITGO) in January 2024.

Published in Dawn, December 31st, 2023

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