Thursday, 23 March 2023

Tax Collections Increased by 37%

The Federal Board of Revenue (FBR) collected Rs1.84 trillion in just four months, an increase of 37% or close to Rs500 billion over last year.

It exceeded the July-October target by Rs228 billion. Against the target of Rs1.6 trillion, the FBR provisionally collected Rs1.84 trillion, exceeding the goal by Rs228 billion, according to the FBR officials. The number may change once final figures are available.

During the first four months of previous fiscal year, the FBR had collected Rs1.34 trillion and it now recorded a nearly Rs500 billion increase at a growth rate of 37%. The annual target of Rs5.829 trillion is within reach.

However, the IMF and Pakistan discussed over Rs525 billion in additional tax measures and talks boiled down to sales tax exemptions of around Rs400 billion that the fund said should be withdrawn with immediate effect.

Overall, the FBR collected 66% or Rs1.21 trillion in indirect taxes – general sales tax, customs duty and federal excise duty, which were the three main sources of indirect taxes.

Similarly, Rs957 billion or over 52% of the total collection was at the import stage.

The FBR collected Rs622 billion in income tax in the first four months of this fiscal year, up by Rs151 billion or 32% over the same period last year. Over Rs87 billion worth of income tax has also been collected at the import stage.

The income tax collection was Rs56 billion higher than the target set for the first four months. The share of income tax in total revenues stood at 34%, which has placed an increased burden on people who have lower capacity to pay.

The FBR showed 41% growth in sales tax collection in the July-October period due to heavy reliance on import taxes. It collected Rs826 billion in sales tax in four months, up by Rs241 billion.

The FBR collected Rs256 billion in domestic general sales tax (GST) compared with Rs267 billion last year, after adjusting for refunds.

Contrary to that, GST collection at the import stage stood at Rs569 billion in the first four months of the current fiscal year against Rs318 billion last year, an increase of Rs251 billion or 79%.

Total sales tax collection of Rs826 billion was Rs134 billion higher than the target, thanks to the collection at the import stage.

Federal excise duty collection amounted to Rs97 billion in the four month period, Rs16 billion or 20% more than the corresponding period of previous year.

Similarly, the customs duty collection increased to Rs291 billion, higher by Rs86 billion or 42%. The custom duty collection was Rs37 billion more than the target.

The net collection in October 2021 came in at Rs435 billion, registering an increase of 31% or Rs104 billion compared with October last year collection, according to report published in ‘Express Tribune‘.

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