Revenue collection exceeds 7-month target at Rs2.57tr

ISLAMABAD: The Federal Board of Revenue (FBR) collection in the first seven months (July-January) of the current fiscal year stood at Rs2.570 trillion, surpassing the projected Rs2.550tr target by Rs20 billion, shows provisional data released on Saturday.

However, the revenue collection increased by 6.4 per cent year-on-year when compared to Rs2.416tr during the same period last year.

While preparing the budget for 2020-21, the government had assured the International Monetary Fund of raising Rs4.963tr as against Rs3.989tr collected in FY20 — a projected increase of 24.4pc.

FBR Chairman Javed Ghani said the improved revenue performance is a reflection of growing economic activities despite facing the challenge of the second wave of Covid-19.

Going forward, he said, it is expected that this revenue performance would be further strengthened as economic recovery gains more momentum.

On a monthly basis, the net collection in January was Rs364bn against a target of Rs340bn, surpassing the target by over 7pc or Rs24bn. Revenue collection increased by 24pc year-on-year when compared to Rs294bn during the same month last year. This is the first double-digit monthly growth year-on-year, the FBR said.

January records double-digit growth year-on-year

The amount of refunds was Rs129bn compared to Rs69bn paid last year, showing an increase of 87pc. This reflects FBR’s resolve to fast-track refunds to prevent liquidity issues for export industry.

As part of the broadening of tax base, early signs suggest such efforts are bearing fruit. As of Jan 30, income tax returns filed numbered 2.52 million compared to 2.31 million last year, showing an increase of 9pc. The tax deposited with returns was Rs48.3bn compared to only Rs29.6bn, an increase of 63pc.

Besides, the FBR has issued notices to nearly 1.4 million taxpayers, who were supposed to file return, or filed nil returns, or mis-declared their assets to comply with their legal obligations. The exercise is said to be eliciting an encouraging response. Despite the introduction of several measures, the realisation of income tax is much below expectations. The income tax collection during the July-January period stood at Rs955bn as against the target of Rs1,020bn, showing a shortfall of Rs65bn.

The income tax collection, however, showed growth of 5pc when compared with collection of Rs917bn during the same period last year.

Meanwhile, the sales tax collection jumped 16pc to Rs1.193tr in the first seven months of FY21 from Rs1.027tr in the same period last year. However, the target was projected at Rs1tr. The growth came as a result of a rise in fuel prices, increase in imports and revival of economic activities during the period under review.

The federal excise duty (FED) collections were up 3pc to Rs149bn as against Rs144bn last year. The FED target for July-January was set at Rs171bn, which was missed by Rs22bn.

Moreover, customs collection stood at Rs399bn during the July-January period this year as against Rs381bn over the last year. The target projected under customs was Rs341bn, which was surpassed. The customs duty in January saw a growth of 22pc over last year and also surpassed the projected target.

The customs department also paid out the pending customs rebate in January as well due to higher growth in revenue collection.