Abdul Wajid Khan

The Federal Board of Revenue (FBR) collected net revenue of Rs489 billion during August 2022, which has exceeded the target of Rs.483billion, WealthPK reports. According to the latest provisional revenue collection figures, released by the FBR, it collected net revenue of Rs 489 billion during August 2022, which has exceeded the target of Rs483 billion against Rs448 billion collected during the same period last year.

The gross collection reached Rs526 billion against Rs 462 billion in August last year, showing an increase of 14%. The amount of the refunds disbursed during August was Rs37 billion as compared to Rs14.3 billion paid last year, showing an increase of 161%.

According to the FBR, the figures would further improve after the book adjustments have been considered. The revenue collection is the highest ever in the month of August. This outstanding revenue performance reflects FBR’s resolve to build on its growth trajectory despite floods, zero rating on petroleum products and import compression. The significant revenue increase in August is attributed to various policy and revenue measures introduced by the government in the Finance Act 2022.

Unlike in the past, there is a visible focus on taxing the rich. Owing to this paradigm shift, the growth in domestic income tax is almost 38%. Likewise, there is a significant upsurge in advance tax collected during August, which shows a 72% increase as compared to the corresponding period of the previous year.

Provisional collection of income tax, sales tax, federal excise and customs duty were Rs165 billion, Rs218 billion, Rs24 billion and Rs82 billion, respectively, against Rs124 billion, Rs223 billion, Rs23 billion and Rs77 billion during the corresponding period of the previous year.

Total taxes collected during July and August stood at Rs948 billion against the target of Rs926 billion. Analysts said that the government should take more steps to facilitate tax submission. Dr Nasir Iqbal, an economic expert, told WealthPK that the government should focus on further streamlining the FBR’s tax recovery mechanism. He said that strict action should be taken against the officials in the field formations where tax recovery was low.

He said that the government should ensure maximum utilisation of modern technology to identify potential taxpayers who were still out of the tax net. Dr Nasir Iqbal hoped that with 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.

The Ministry of Finance in its latest economic outlook report said that the financial sector remained under tremendous pressure in 2022 due to additional expenditures related to the procurement of the Covid-19 vaccine, payment of circular debt and social sector spending.

Higher international oil and commodity prices in the aftermath of the Russia-Ukraine conflict exacerbated the situation further. The expansionary fiscal policy stance in 2022 reversed the consolidation gains achieved in the preceding two years owing to these challenges.

Consequently, the fiscal deficit surpassed the revised target of 7.1 % for Gross Domestic Product (GDP) and stood at 7.9 % in the financial year 2021-22. However, in the financial year 2022-23, the fiscal deficit is expected to reduce to 4.9% of GDP while the primary balance is likely to be in surplus of Rs153 billion.

To achieve the set targets, the budget for the financial year 2022-23 is focused on stabilising economic growth, increasing revenues, enhancing exports and protecting the vulnerable segments of society through relief measures and pro-poor initiatives, according to the report, available with WealthPK.

Credit : Independent News Pakistan-WealthPk