On the strength of enforcement actions and consistent income tax growth, the Federal Board of Revenue (FBR) exceeded its five-month tax collection target of approximately Rs2.7 trillion despite slow economic growth and import constriction.
However, the revenue board continued to face significant challenges with submitting income tax returns from July through November of the current fiscal year. According to the statement issued by the FBR, “The FBR continues to demonstrate excellent performance in revenue collection for the fifth consecutive month of current financial year and has exceeded both the five-month target of Rs2.68 trillion as well as monthly target of Rs537 billion,”
It was also stated that despite import compression and the absence of sales tax on petroleum items, both goals had been met. Although just 2% economic growth is anticipated, the inflation rate of roughly 27% has a significant impact on increased revenue collection following income tax receipts.
According to preliminary data from the FBR, Rs2.69 trillion was collected as opposed to Rs2.33 trillion during the same time last year, representing an increase of more than 15.3%. However, the rise was less than the current inflation rate of 27%, which the FBR has to address. In addition, the FBR has provided refunds of Rs 135 billion compared to Rs 124 billion last year.
Provisional tax receipts for November 2022 was Rs538 billion, an increase over the previous month.
According to the statement, the FBR appreciated the efforts of tax officers and field formations to “optimise revenue collection in challenging circumstances as sales tax collection on imports is exhibiting a negative growth.” The extraordinary actions performed in the areas of rehabilitation, monitoring, and ongoing vigilance allowed for the achievement of the goals, it was underlined.
The FBR only collected Rs24.2 billion in income tax arrears for the five-month period, compared to Rs11.7 billion the previous year. Compared to November of the previous year, when Rs6.7 billion was collected.