IMF’s quarterly tax target of Rs1.9tr: FBR has to collect Rs770bn this month

ISLAMABAD: Federal Board of Revenue (FBR) will have to face a gigantic task of fetching Rs770 billion in September for meeting the IMF target of Rs1,977 billion for the first quarter of the current fiscal year.

According to provisional revenue collection figures, the FBR has so far collected Rs669 billion in August 2023 against the fixed target of Rs649 billion, surpassing the target with a margin of Rs20 billion.

“The collection of Rs669 billion demonstrates the growth of 34.5 percent as compared to last August 2022” a top official of FBR told The News.

The FBR had collected Rs538 billion in July 2023 so the two-month (July and August) revenue collection stood at Rs1,207 billion.

Under the IMF’s Standby Arrangement (SBA) program of $3 billion, Pakistan had agreed upon with the Fund for FBR’s indicative target of Rs1,977 billion tax collection for the first quarter (July-September) period clearly indicating that the FBR would have to fetch Rs770 billion in last month of the first quarter to display the desired tax collection on September 30, 2023. The higher Consumer Price Index (CPI) helped the FBR to jack up its desired tax collection in the current fiscal year. The government has agreed with the IMF to materialize an ambitious tax collection target of Rs9,415 billion for the current fiscal year. In recent weeks, there has been a massive hue and cry over the inflated bills whereas the parliamentarians belonging to the Upper House of the Parliament asked the government to reduce the number of taxes and surcharges on power bills that resulted in ballooning their monthly bills. According to the FBR’s announcement made here on Thursday stating that despite all odds, FBR has put in tremendous efforts to achieve the revenue target for the month of August 2023. As against a target of Rs649 billion, FBR was able to collect Rs669 billion net revenue, while refunds amounting to Rs42 billion were issued as against Rs38 billion in August 2022. For the first two months, FBR has collected Rs1,207 billion against assigned target of Rs1,183 billion. FBR collected Rs488 billion under the head of income tax as compared to Rs347 billion in the same period, thereby showing a growth of 41 percent. A healthy growth of 16 percent was achieved in the collection of sales tax with collection surpassing Rs473 billion as against Rs407 billion in July and August 2022. Almost Rs80 billion were collected as FED showing an increase of 57 percent.