ISLAMABAD: Revenue collection in July grew by over 15 per cent from last year to Rs300 billion, up Rs57bn or 23.4pc from the target set for the month, data released by Federal Board of Revenue (FBR) spokesperson showed on Thursday.
The data for revenue collection in the first month of current fiscal year showed a sharp acceleration in economic activity, leading to higher collection in customs duty.
The government, while preparing the budget for the ongoing fiscal year, had assured the IMF to raise Rs4.963 trillion in FY21 against Rs3.989tr collected in FY20. The collections in the current fiscal year to increase by 24.4pc.
However, the Finance Act lacks any plan on how the government aims to raise the additional revenue of Rs974bn to meet the IMF targets.
Meanwhile, the new management at the FBR had set the collection target for July lower by Rs17bn at Rs243bn compared to July 2019 collection of Rs260bn. Until July 30, as per provisional figures, the revenue collected stood at Rs297bn. However, FBR believes to get extra Rs3bn from book adjustments.
As per the agreed revenue plan with the IMF, revenue collection target for the month should have been set at around Rs322bn.
Well-placed sources at the FBR told Dawn that Member Operations Ashfaq Ahmad has projected lower targets in the first month of the current fiscal year for income tax, sales tax, and FED to show higher growth figures to his bosses.
Ashfaq, who also holds an additional post of international taxes, is now allegedly calling the shots in the tax machinery, who also sidelined competent officers and replaced them with junior officers. The recent reshuffling has created a wave of uncertainty among the senior officers of Inland Revenue Services.
The FBR said the revenue collection in July surpassed the target by Rs57bn.
Meanwhile, inland revenue taxes —income, sales, and federal excise duty — overshot the target by Rs52bn, whereas customs collection exceeded the target by Rs5bn. However, the customs duty collection in July was Rs47bn against the target of Rs43bn, showing an increase of 9.3pc over the target.
The customs duty collection during July 2019 was Rs46bn.
According to the statement, this growth was achieved despite the impact of Covid-19 on the economy, during which the country mostly remained in lockdowns. The revenue trajectory also beat the adverse effects of governments’ import compression policy.
The FBR released sales tax refunds of Rs15bn in July compared to Rs7bn over the corresponding month of last year. Sales tax refunds are being issued under centralised and automated system called FASTER, which clears refunds to exporters within 72 hours for the first time.
In July, the income tax collection stood at Rs104bn as against Rs96bn in the same month last year, an increase of 8.33pc. The target for the income tax was projected lower than the previous year collection at Rs88bn.
The sales tax collection reached Rs142bn against last year’s collection of Rs114bn, showing a growth of 24pc. The target projected for the sales tax was at Rs102bn, much lower from last year’s collection. The impressive revenue collection came from petroleum products after the government increased price.
The FED collection reached to Rs18bn as against Rs10bn collected during the same month last year. The FED target for the month was projected at Rs10bn — same as the last year’s target with no growth.
According to sources, new tactics were being used at the FBR by keeping revenue collection targets at a lower level in the first quarter to hide the inefficiency and pass it on to the impact of Covid-19.
Moreover, the FBR has also launched an unprecedented crackdown on corruption dismissing and suspending about a dozen officers and officials only during July, added the statement.