FBR needs over 25% growth in collection to achieve annual target

KARACHI: The Federal Board of Revenue (FBR) has to grow the revenue collection by over 25 per cent during the next five months to achieve the annual collection target of Rs7.5 trillion for the fiscal year 2022/23.

According to the data available, the FBR needs around Rs3.52 trillion during the next five months (February-June) to achieve the collection target.

The revenue body collected around Rs2.8 billion in the last five months of the fiscal year 2021/22.

At the beginning of the year, the revenue board was required to grow the collection at 21.5 per cent. However, due to difficult economic conditions, it is below the collection target during the first seven months (July-January) of the current fiscal year.

According to the provisional data, the FBR collected Rs3.965 trillion during the first seven months of the current fiscal year 2022/23, which means the revenue body collected around 53 per cent of the target.

Further, it collected Rs537 billion in January 2023, whereas, the average monthly collection to achieve the fiscal year target is over Rs700 billion.

The FBR issued a statement, saying that it had demonstrated a commendable revenue collection performance during January 2023 and has not only achieved the monthly budgetary target of Rs533 billion but surpassed it by Rs4 billion.

According to the provisional figures, the revenue board has collected Rs537 billion in January 2023; thereby, showing an impressive growth of 23 per cent, compared with the same period of the last year.

Cumulatively, the FBR has collected Rs3.965 trillion in the first seven months of the current financial year against Rs3.367 trillion collected in the corresponding period of the last year, depicting a growth of 18 per cent.

The FBR claimed that the third quarter of the current year started with an impressive performance and it is committed to meet the annual budgetary target of Rs7.47 trillion for the current financial year, despite economic challenges.

The direct tax collection has grown at a robust pace, showing a growth of 48 per cent during the first seven months of the current financial year, which is reflective of the government’s policy of shifting tax burden to wealthy and affluent segments of the society.

It is also highlighted that the FBR’s administrative and enforcement measures have yielded the desired results, which is reflected in the growth of direct taxes in special and the domestic taxes, at large.

The growth in domestic taxes is 40 per cent during the same period. The contribution of domestic taxes has also increased from 50 per cent last year to 59 per cent during the current year.

The FBR also claimed that the collection from the Customs duty has shown an increase of 16 per cent in January 2023, compared with the same period of the last year.

Additionally, the revenue board has not stopped short of taking care of the exporters’ liquidity problems and has issued refunds of Rs208 billion during the first seven months of the current financial year as against Rs183 billion during the corresponding period of the last year, which is 14 per cent more than the previous year.

The FBR appreciates all those taxpayers whose due contributions helped achieve the budgetary target and also lauds the endeavours of all the field formations and its officers for their untiring efforts and commitment to optimise the revenue collection in these challenging economic situations.

This growth in tax revenues, especially direct taxes, underscores the resolve of the government and the FBR to make Pakistan a prosperous nation and to withstand financial shocks and bridge the fiscal deficit, the FBR said.