ISLAMABAD: The Federal Board of Revenue (FBR) has surpassed its annual tax collection target and fetched around Rs6,125 billion for the outgoing fiscal year 2021-22 ending on June 30, 2022.
The FBR made more than 52 percent collection through the import stage while GST collection on the domestic stage witnessed a decrease. Federal Minister for Finance Miftah Ismail tweeted, “As per PM Shehbaz Sharif’s instructions, a few days ago we paid all processed DLTL claims pending for the last three years. Today FBR paid all processed faster, sales tax, income tax and export rebate claims that were due. Every single processed claim. Alhamdolillah”.
The FBR has surpassed its annual tax collection target mainly because of increased imports, massive devaluation of exchange rate. The FBR’s tax collection had been revised upward from Rs5.928 trillion to Rs6.125 trillion under the IMF conditions on the eve of completion of the 6th Review under the $6 billion Extended Fund Facility (EFF) when the government failed to fetch petroleum levy in the first half of the outgoing fiscal year. Then the target of petroleum levy was revised downward from Rs610 billion and the FBR’s target was jacked up to Rs6.1 trillion.
The increased imports bill, which is going to touch$78 billion for the outgoing fiscal year, helped the FBR increase its tax collection and display its desired tax collection target. The GST on domestic stage which shows economic activities and consumption power of people could not show improvements during the outgoing financial year.
According to an official announcement on late Thursday night, the Federal Board of Revenue (FBR) has released the provisional revenue collection figures for the fiscal year 2021-22. The FBR has collected net revenue of Rs6,125 billion during the outgoing fiscal year (July 21-June 22), which has exceeded the upward revised target of Rs6,100 billion by Rs25 billion.
It represents a massive growth of about 29.1% over the collection of Rs4,744 billion during the same period last year. Likewise, the gross revenue collection increased from Rs4,996 billion during the last year to Rs6,460 billion this year, showing an increase of 29.3%. One of the key features of the outstanding performance by the FBR is reflected in the significant increase in direct taxes, which registered growth of 32% over the last year.
This is in line with the policy of the government to enforce taxation on income earned, thereby, reducing indirect taxation. Furthermore, the net collection from income tax during the year is Rs2,278 billion against Rs1,731 billion last year whereas the sales tax of Rs2,525 billion has been collected this year against Rs1,983 billion last year. The net collection from customs duty is Rs1,000 billion this year against Rs747 billion last year while the collection from federal excise duty is Rs322 billion this year against Rs284 billion last year.
Similarly, the net collection of Rs1,741 billion during the 4th quarter of the financial year against Rs1,351 billion collected in the 4th quarter last year, represents an increase of 31.7% despite many challenges. The net collection for June 2022 is Rs763 billion representing an increase of 28.9% over Rs580 billion collected in June 2021.
The year-on-year growth of 29.1% is unprecedented, particularly, as it is realized on the heel of 31.7% growth in the 4th quarter. These figures would further improve before the close of the day and after book adjustments are taken into account.
On the other hand, the amount of refunds of Rs335 billion disbursed during the year compared to Rs251 billion paid in last year, reflects an increase of 33.3%. Likewise, refunds of Rs105 billion issued during the 4th quarter this year against Rs68 billion issued in the 4th quarter last year, increased by 55.2%. Similarly, refunds of Rs39 billion issued during June 2022 against Rs27 billion in June 2021 increased by 43.8%. In June, the refunds have been issued to more than 5,800 taxpayers as compared to 3,100 in June last year. This is reflective of FBR’s resolve to fast-track refunds to prevent liquidity shortages in the industry.
The robust revenue performance is even more significant due to effective enforcement by field formations. The FBR’s POS System to document the retail sector has integrated a total number of 10,611 POS machines of 4,563 tier-1 retailers across the country. A total of 425 million tax invoices were generated by tier-1 retailers integrated with POS. The total number of six POS computerised draws have been held in which Rs318 million was disbursed among 6,042 lucky winners. It is heartening to note that the number of FBR invoices is increasing as a result of effective monitoring despite a resource crunch.
Yet another watershed initiative by the FBR to capture Large Scale Manufacturing (LSM) across the country through the Track & Trace System (TTS) has already started paying dividends. Sales tax collection from the sugar sector during the current crushing season (December 2021–March 2022) under the Track and Trade System amounted to Rs26.03 billion as compared to the corresponding period of the previous crushing season which stood at Rs19.9 billion, showing an increase of 31% in four months only. Similarly, sugar production during the current crushing season was recorded at 7.85 million tons as compared to 5.67 million tons of the previous crushing season, depicting a 39.7% increase over the last year. Tobacco and fertiliser sectors will also be brought under the TTS during the first quarter of the financial year 2022-23.
Likewise, Pakistan Customs collected Rs 1 trillion during the year against Rs747 billion under the head of customs duty in FY 2020-21 against the assigned target of Rs960 billion and exceeded its target by Rs40 billion, registering a sizeable growth of 34%. Whereas during June 2022 an amount of Rs115 billion has been collected under the head of customs duty against the monthly target of Rs88 billion, which is 30% more than the assigned monthly target. Similarly, duty draw back issued by Pakistan Customs during the year are Rs33 billion as against Rs24 Billion last year.