By Abdul Wajid Khan

ISLAMABAD, Aug 05 (INP-WealthPK): The Federal Board of Revenue (FBR) exceeded the tax collection target by Rs15 billion in the first month (July) of the fiscal year 2022-23.

According to the latest official provisional revenue collection figures, FBR collected net revenue of Rs458 billion in July against the target of Rs443 billion, reports WealthPK.

This represents a growth of about 10% over the collection of Rs417 billion during the same period, last year.

These figures would further improve after book adjustments have been taken into account.

In a statement, the FBR said these collections were the highest ever in the month of July. This outstanding revenue performance is a reflection of FBR’s continued resolve to build further on its growth trajectory achieved during last year.

On the other hand, the gross collection increased from Rs438 billion in July last year to Rs486 billion, showing an increase of 11%. 

Likewise, the amount of refunds disbursed during July was Rs28 billion compared to Rs21 billion paid last year, showing an increase of 32%.

This is reflective of FBR’s strong commitment to fast-track refunds and thereby prevent liquidity shortages in the industry.

FBR said the significant revenue increase in July was largely the outcome of various policy and revenue measures introduced by the government in Finance Act 2022.

Unlike in the past, there is a visible focus on taxing the rich and affluent. Owing to this paradigm shift, the domestic taxes contributed 55% in total collections, while import taxes remained 45%. This has reversed the trend as previously taxes at import stage were 52-53% of overall collections. Likewise, the growth in domestic Income Tax is almost 31%, which is a remarkable shift towards direct taxation.

Likewise, there was a significant upsurge in Advance Tax collected during July. There was also 118% increase in Advance Tax on sale of properties under Section 236-C due to a withholding provision applicable irrespective of the holding period.

Likewise, a 40% increase in Advance Tax under Section 147, especially on banking companies, was due to change in tax rate.

Similarly, Federal Excise Duty (FED) on cigarettes/tobacco registered a record growth of over 47% or Rs2.6 billion, and the corresponding increase in Sales Tax from tobacco sector registered a record 67% growth.

The increased FED on international air travel also registered growth of over 200%.

Furthermore, Pakistan Customs collected Rs67 billion under the head of Customs Duty in July 2022 against Rs65 billion collected during the same period last year, registering a marginal growth of 2.58%. However, the tax collection under this head fell short of the Rs77 billion target, which is due to import compression policy of the government, aiming to control the outflow of US dollars.

Furthermore, FBR suffered a loss of about Rs11 billion in Sales Tax against zero rating of petroleum products.

It is pertinent to mention here that Income Tax returns for Tax Year-2021 reached 3.4 million compared to 3 million in Tax Year-2020, showing an increase of 13%.

The tax deposits with returns during Tax Year 2021 were Rs76 billion compared to only Rs52 billion in Tax Year 2020, showing a significant increase of 46%.

Building further on its ongoing drive to integrate Tier-1 retailers across the country, around 23,265 point of sale (POS) terminals were integrated with real-time POS reporting system of FBR.

Talking to WealthPK, economic expert Dr. Nasir Iqbal said that despite the economic downturn, FBR did excellent job to successfully meet the upward revised revenue target of Rs6.1trillion for the previous fiscal year.

He suggested that the government focus on further streamlining the tax recovery mechanism of FBR to improve its tax recovery. He said strict action should be taken against the officials in the field formations if tax recovery is low. He said the government should take more steps to provide ease to taxpayers in tax submission.

He further said the government should ensure maximum utilisation of modern technology to identify the potential taxpayers.

Dr. Nasir Iqbal hoped that with the implementation of all necessary measures, including the efficient utilisation of technology and further streamlining tax recovery mechanism, FBR would also be able to achieve its tax revenue target of around Rs7.4 trillion for the ongoing fiscal year.

Credits: Independent News Pakistan—Wealthpk