Revenue sees lacklustre growth in October

ISLAMABAD: Revenue collection in October stood at Rs333 billion, missing the target of Rs352bn by 5.4 per cent despite 2pc year-on-year increase from Rs325bn, provisional data showed on Saturday.

On a cumulative basis, the Federal Board of Revenue (FBR) collection in the first four months of this fiscal year surpassed the target despite missing the monthly target in October.

During July-October, the FBR collected Rs1.33 trillion as against the projected target of Rs1.32tr; surpassing it by over Rs15.7bn or 1.18pc.

In October, income tax collection fell short of target by Rs18bn to Rs108bn as against Rs126bn target projected for the same month. The income tax collection posted no growth in October when compared with the last year’s collection of Rs108bn.

Revenue realisation of income tax is much below expectations despite introduction of several measures.

Meanwhile, sales tax collection during October reached Rs165bn against last year’s Rs145bn, showing a growth of 13.79pc. The projected target for the sales tax collection was Rs151bn — slightly higher than last year’s collections during the same month. The impressive sales tax collections came as a result of rise in POL prices, increase in imports and revival of economic activities in October.

FBR exceeds the four-month target of Rs1.33tr by Rs15.7bn

The federal excise duty (FED) collection rose 11pc to Rs22bn as against Rs20bn last year. The FED target for October was set at Rs28bn, which was missed by Rs6bn.

Moreover, customs collection in October reached Rs52bn as against Rs56bn collected over the corresponding month last year, showing a decline of 7.14pc. The government had projected a revenue target of Rs48bn for the month under review.

The FBR is likely to book additional revenue after book adjustments and reconciliation in the next few days.

The payment of Rs63.4bn refunds in the first four months — an increase of 81pc over last year’s payment of Rs35bn — showed a sharp acceleration in economic activity, leading to revival of industrial production in the post-Covid period.

The government, while preparing the budget for the ongoing fiscal year, had assured the International Monetary Fund to raise Rs4.963tr in FY21 against Rs3.989tr collected in FY20 — a projected increase of 24.4pc.

However, the government is yet to come up with a plan to raise the additional revenue of Rs974bn to meet the target.

Following the slowdown in Covid-19 infections, the economic activity in the country is now being revived through multiple economic stimuli and relief measures. Collections in October show an increase in dutiable imports.

In another statement, the FBR urged taxpayers to file income tax returns for individuals and companies till Dec 8. The date will not be extended further, added the statement.