FBR collects Rs4.457tr in six months

ISLAMABAD: The Federal Board of Revenue (FBR) has surpassed its collection target with a margin of Rs32 billion; its collection stood at Rs4,457 billion in the first half (July-Dec) period against the target of Rs4,425 billion during the current financial year.

The FBR’s collection in an outgoing month (December 2023) stood at Rs972 billion so far against the desired target of Rs974 billion. In the first five months (July-Nov) period, the FBR had collected Rs3,485 billion. Now after the collection of Rs972 billion in December, the overall provisional collection stood at Rs4,457 billion, which was higher than the agreed indicative target of Rs4,425 billion given by the IMF.

The surpassing of tax collection target will enable Islamabad to meet the crucial target of the IMF that will pave the way for the completion of second review and release of the last and third tranche of $1.1 billion under the Standby Arrangement (SBA) programme.

It is yet to be seen whether the IMF would dispatch its review mission in the first week of February 2024 for holding review talks or may delay the talks in the wake of general elections scheduled to be held on February 8, 2024.

The existing IMF SBA programme will expire on April 12, 2024, so in case of elections the review talks might be delayed on account of installation of the new government after the general elections. The review talks in such a scenario might be held by the end of February or early March 2024.

“We are expecting some more revenues when the figures are finalised for the first six months of the current fiscal year,” the FBR Member Inland Revenues (IR) Policy and Spokesperson Afaq Qureshi said when The News sought his comments on Saturday evening. He said the FBR had so far collected Rs4,457 billion against the fixed target of Rs4,425 billion for the July-December period in the current fiscal year.

The FBR would have to collect Rs4,958 billion in the second half (Jan-June) period in order to reach the desired tax collection target of Rs9,415 billion for the current fiscal year ending on June 30, 2024.

So far, the FBR has heavily relied upon Income Tax and withholding taxes in order to maximise its collection despite slowing down of imports and overall economic activities. However, the higher inflationary pressures helped the FBR in jacking up its revenue collection.

In the first five months, the average CPI based inflation was hovering around 30 percent while the real GDP growth rate also turned into positive in the first quarter of the current fiscal from negative range in the last whole financial year.

The sources said that the FBR has planned to introduce simplified retailers scheme from mid of January 2024 provided assent is granted by the Caretaker Minister for Finance Dr Shamshad Akhtar. There is no requirement of amendments in the existing laws as the last government empowered the FBR with assent of parliament to introduce a scheme for retailers for which it will only require approval of finance minister and the federal cabinet.

The FBR has prepared all procedural requirements and is awaiting approval of the government to launch this simplified scheme. If the caretaker government fails to launch the retailers scheme, it may die down soon after installation of any fresh government coming into power after the elections.

When this scribe contacted FBR Chairman Amjad Zubair Taiwana and inquired whether there was any plan to introduce a simplified scheme for retailers by mid of January 2024, he replied “not yet decided”. It clearly indicates that the ultimate fate of this scheme still hangs in the balance.