ISLAMABAD: The Federal Board of Revenue (FBR) collected Rs4.382 trillion in the first nine months of the current fiscal year (9MFY22), exceeding the target of Rs4.134tr by Rs248 billion, provisional data compiled by the tax body showed on Thursday.
Compared with the revenue collection of Rs3.394tr in the same period in 2020-21, 29.1 per cent growth was posted in July-March FY22. The growth will provide a cushion to the incumbent government for subsidising petroleum prices, reduce electricity prices and offer incentives in taxation to the IT sector and industries.
The revenue collection in March fell short of target by Rs29bn to Rs575bn against Rs604bn projected for the same month. The revenue collection rose by 20.5pc to Rs575bn from last year’s Rs477bn.
Revenue collection started slowing down in the month of March. The statistics show that revenue collection not only fell of short target but also show collection posted a relatively low growth over the last year.
An official announcement of the FBR said that for the first time ever in the country’s history, sales tax on all POL products has been reduced to zero which cost tax body Rs45bn in March 2022. Likewise, revenue impact of sales tax exemptions provided to fertilisers, pesticides, tractors, vehicles, and oil & ghee come to Rs18bn per month.
Similarly, zero rating on pharmaceutical products has cost the FBR Rs10bn in sales tax during the month of March. Thus, in aggregate these relief measures have impacted revenue collection by approximately Rs73bn during the month of March 2022.
Furthermore, political uncertainty and import compression also negatively impacted revenue collection during March.
The government has already announced that the new FBR revenue target will be Rs6.1tr. This target was revised upwards on the plea to keep the budget deficit at a committed place. The government, while preparing the budget for the current year, had assured the IMF of raising Rs5.829tr in FY22 against Rs4.721tr collected in FY21.
Rising inflation coupled with withdrawal of Rs343bn exemptions and several other measures like increase in the rates of withholding tax on vehicles, mobile phones and tax on entertainment will add revenue to the existing projections.
The gross collections including refunds and rebates payments which increased by 28.9pc from Rs3.577tr during July-March FY21 to Rs4.611tr in 9MFY22.
The amount of refunds disbursed was Rs229bn during July- March FY22 compared to Rs183bn paid last year, showing an increase of 25pc. Likewise, the amount of refunds disbursed during March was Rs31.9bn registering an increase of 21.3pc from the same month in 2021 when refunds disbursed were Rs26.3bn. This is reflective of FBR’s resolve to fast-track refunds to prevent liquidity shortages in the industry.
With the rising import bill coupled with an increase in imports of smuggling-prone items on legal channels, gross customs collection stood at Rs728bn during 9MFY22 as against Rs547bn last year, indicating a hefty growth of 33pc.
Gross Income Tax (IT) collection during 9MFY22 stood at Rs1.58tr as against Rs1.26tr collected over the same period last year, indicating a growth of 25.4pc. Very nominal IT refunds were paid during the months under review.
Meanwhile, Gross Sales Tax collection jumped pc to Rs2.05trn from Rs1.57trn in the same period last year, showing a growth of 30.5pc. The growth came as a result of the highest ever rise in fuel prices, increase in imports and revival of economic activities during the period under review.
Federal Excise Duty gross collections were up 14.8pc to Rs225bn as against Rs196bn last year.
According to FBR statement the ongoing unprecedented and constant growth trajectory in revenue collection has been achieved despite massive tax relief given by the government on various essential items to common man.
Published in Dawn, April 1st, 2022
https://www.dawn.com/news/1682811/revenue-collection-up-291pc-to-rs44tr
