ISLAMABAD: Tax collection by the Federal Board of Revenue (FBR) fell short of the target by almost Rs1 billion in March, mainly due to a drop in domestic taxes and customs duty, provisional figures showed on Saturday.
The revenue collection in March stood at Rs878bn against a projected target of Rs879bn. It increased by 32.62pc compared with Rs662bn in the corresponding month last year.
These figures would further improve after book adjustments are taken into account. Moreover, the revenue collection figure is up to March 30. The FBR is expecting more revenue on Sunday, the last day of the current month.
During the first nine months (July-March) of FY24, the FBR collected Rs6.709 trillion, exceeding the Rs6.708tr target by Rs1bn. As a result, the shortfall witnessed in February and January was covered owing to higher collection in March 2024.
The government has projected a revenue collection target of Rs9.415 trillion for FY24, an increase of Rs2.219 trillion or 30pc from the revised collection of Rs7.2tr in FY23.
Falls short by Rs1bn against target
The revenue collection at the import stage has started to pick up momentum because of the increase in imports. However, the FBR did not release the figures for sales tax refunds during the first nine months of the current fiscal year.
The government has already finalised a digital-based system to broaden the country’s narrow tax base. The schemes also include professional services providers like lawyers, doctors, engineers, and other services providers to tax their income.
Pakistan barely has 2.3 million taxpayers. Corporate tax filers make up 0.8pc of commercial and industrial electricity users, and GST-registered entities make up barely 13pc of the 1.4 million taxpayers.
Since his appointment as Finance Minister, Muhammad Aurangzeb has stated that he will focus on end-to-end digitalisation because it is efficient in plugging leakages through enhanced execution.
However, he used the FBR Track and Trace system as an example. Although it has been in existence for several years, it has failed to produce the anticipated results.
The second critical area is settling the Rs1.7tr backlog of litigation pending in tribunals. The former finance ministers made multiple attempts to resolve the issue but were unable to reduce the backlog.
Published in Dawn, March 31st, 2024
