ISLAMABAD: The revenue collection by the Federal Board of Revenue (FBR) increased by 3 per cent year-on-year during October reaching Rs277.4 billion.

The revenue body continues to struggle in its efforts to increase tax collection despite several measures proposed by the government in mini-budget.

The collection during October is still far behind the projected target for the month, a well-placed source at FBR told Dawn. He said that even income tax and sales tax collection for the month is significantly less than the same period last year.

The outlook for tax collection during the ongoing quarter remains bleak since FBR fell short of the target during the last quarter which was adjusted in the second quarter’s target.

The loss in revenue collection is partly attributable to the ongoing management problems at the FBR as tax officers are still awaiting notification on their expected transfers. The management at the board failed to complete the task which caused decline in collection.

The provisional revenue figures show that collection during October reached to Rs277.4bn, posting a meagre growth of 3.14pc from Rs268.9bn over the corresponding month last year. Of the total revenue, income tax collection fell to Rs87.1bn from Rs90.04bn; down 3.26pc.

In addition to that, sales tax collection clocked in at Rs116.52 up 0.71pc from Rs117.4bn same month last year. On the other hand, customs duty collection during the month reached Rs57.5bn and federal excise duty collection clocked in at Rs16.3bn with both heads posting a double digit growth of 20pc and 18.7pc respectively.

Online Tax Collection

The FBR after allowing payment of federal taxes, including income tax, sales tax, customs duty and federal excise duty via always-on alternate delivery channels, i.e. ATM, online banking, phone banking and contact centers recorded 14,904 transactions and received Rs12.24bn from taxpayers during the last nine months.

The collections include Rs8.75bn by the Inland Revenue through 7,304 transactions and Rs3.49 bn secured by the Customs through 7,600 transactions.

Before the launch of this facility, taxpayers had to go through cumbersome five steps to pay taxes which usually included a visit to the National Bank of Pakistan or State Bank of Pakistan (SBP).

Average time consumed in previous modes of payment often exceeded eight hours – starting from the preparation of payment slip ID to the availability of computerised payment receipt.

However, since the launch of always-on alternate channels, the payment time has been reduced to five minutes. The facility, which was launched in March this year by collaboration between SBP and 1Link has resulted in comfort for tax payers to pay their taxes by using alternate delivery channels such as ATM, online banking, phone banking and contact centers.

The digital facility lets taxpayers pay their taxes through ATMs in Pakistan and abroad by accessing their bank accounts online. The new facility is not only providing ease of payment to taxpayers but is also helping Pakistan improve its ranking on the World Bank’s ease of doing business index and attracting local as well as foreign investment in the process.

Published in Dawn, November 1st, 2018