ISLAMABAD - Federal Board of Revenue (FBR) has surpassed the tax collection target by Rs262 billion during first seven months (July to January) of the current fiscal year.
The FBR has successfully maintained momentum of its growth trajectory in revenue collection. According to the provisional information, the country’s premier revenue collection organisation has collected net revenue of Rs 3,352 billion during July, 2021 to January, 2022 of current Financial Year 2021-22, which has exceeded the target of Rs 3,090 billion by Rs 262 billion. This represents a growth of about 30.4% over the collection of Rs. 2,571 billion during the same period, last year.
The net collection for the month of January, 2022 realised Rs. 430 billion representing an increase of 17.2 % over Rs 367 billion collected in January, 2021. These figures would further improve before the close of the day and after book adjustments have been taken in to account. On the other hand, the gross collections increased from Rs 2,705 billion during July, 2021 to January, 2022 to Rs 3,533 billion in current Financial Year July, 2021 to January, 2022, showing an increase of 30.6% Likewise, the amount of refunds disbursed was Rs 182 billion during July, 2021 to January, 2022 compared to Rs 134 billion paid last year, showing an increase of 35.9%.
FBR has introduced a number of innovative interventions with a view to maximise revenue potential
It is pertinent to mention that FBR has introduced a number of innovative interventions both at policy and operational level with a view to maximize revenue potential through digitization, transparency, and taxpayers’ facilitation. This has not only resulted in ensuring the ease of doing business but also translated in a healthy and steady growth in revenue collection. Likewise, the incumbent top leadership of FBR has launched a new culture of clean taxation with a clear focus on collecting only the fair tax and not holding up refunds which are due to be paid. This has not only fast tracked the process of bridging the trust deficit between FBR and taxpayers but also ensured the much needed cash liquidity for business community. That’s precisely why, for the first time ever in the country’s history, FBR continues to surpass its assigned revenue targets despite challenges and price stabilization measures adopted by the government.
The healthy growth in tax collection in first seven months showed that the government would achieve the annual tax collection target of Rs5.8 trillion. Chairman FBR Dr Muhammad Ashfaq Ahmed had already announced that tax collection would touch Rs6 trillion during the current fiscal year. “Our revenue target is Rs5.830 trillion, which is expected to increase till Rs6 trillion by June 2022. We have collected Rs300 billion more revenue than our target till December 31.” He further said that the FBR has achieved the six-month revenue target and we will also meet the yearly target of the current fiscal year.
The government has recently approved the Finance Supplementary Bill 2021 known as mini budget, which would help in increasing the tax collection in the ongoing financial year. The government, in the mini budget, has withdrawn tax exemptions worth of Rs343 billion in remaining period of the current fiscal year. According to the FBR, the withdrawal of tax exemptions of Rs343 billion can be broken into 3 main segments. These segments are pharmaceutical with Rs.160 billion, plant and machinery Rs.112 billion, and goods Rs. 71 billion. It was clarified that Rs. 272 billion of above tax expenditure on account of machinery and pharma is refundable/adjustable. Only Rs 71 billion tax exemptions on goods is the net imposed tax.