FBR records 30pc tax revenue growth during July 2023 to February 2024

ISLAMABAD   -  The Federal Board of Revenue (FBR) has collected revenue of Rs5,150 trillion since July 2023 to mid of February 2024 against Rs3,973 trillion over the same period last FY – almost 30% tax revenue growth.

During the course of this period, tax refunds grew by more than 28%. The month wise revenue collection for July 2023 to January 2024 is as under, July Rs538 billion, Au­gust Rs669 billion, September Rs834 billion, October Rs707 billion, November Rs736 bil­lion, December Rs985 billion and January Rs680 billion.

Overall growth in the domes­tic taxes has been around 40%, while import duty and related taxes grew by 16% over July 2023 to January 2024 period. Growth in revenues gained momentum as GDP has revived and FBR collection has come under tighter scrutiny. Not­withstanding, growth in im­port taxes fell largely because of (i) downward adjustments in import tariffs over the years, and (ii) more recently restric­tions on import licenses im­posed by SBP to contain bal­ance of payments position in the wake of foreign exchange constraints. The revenue col­lection from imports do how­ever incorporate the impact of the improvements in the valua­tion of imports that yielded Rs 151 billion collections as well as anti- smuggling drive (that witnessed almost 69 % growth in FY vis-à-vis FY 22-23).

There is scope to enhance an­ti-smuggling efforts by looking into increasing customs force in Baluchistan which is cur­rently only 378 anti-smuggling staff (compared to 20,000 per­sonnel in the province under­mine the enforcement efforts).

The revenue mobilization from domestic taxes is a wel­come shift. The domestic tax collection is now over 64% of the total revenues collected dur­ing the current financial year. Concurrently the import taxes shared has declined to 36% from more than 50% just 3 years ago.

The tax wise collection re­veals following trends as in­come tax Rs2447 billion, sales tax Rs1766 billion, Federal Excise Duty Rs307 billion and customs duty Rs629 billion. It is worth mentioning here that the government has set tax collec­tion target at Rs9.415 trillion for FY24 as against the revised col­lection of Rs7.2tr in FY23, show­ing an increase of 30 percent. The FBR would have to collect Rs4.3 trillion in remaining five months (February to June) of the current fiscal year to achieve the annual tax collection target.