FBR eyes Rs654bln revenue collection in July-Sept

KARACHI: The Federal Board of Revenue (FBR) bets on withholding and advance taxes to collect 18 percent of the total revenue targeted for the current fiscal year during the first quarter of July-September, sources said on Monday.  

The sources said the FBR estimated Rs654 billion in the revenue collection during the first quarter. The whole-year target is Rs3,621 billion. In the first two months of the current fiscal year, the FBR managed to collect Rs368 billion in taxes and therefore the board requires another Rs286 billion in September to meet the first quarter target.

The official said the remaining collection for the first quarter is achievable as corporate entities are required to pay bulk amount in terms of advance taxes. The official further said the corporate entities, whose financial closings are not during the July to June period, are required to file their income tax returns till September 30 along with the income tax payments.

The FBR also eyes a significant amount on account of collection of withholding taxes on cash withdrawal and non-cash banking transactions by end of the ongoing quarter.  The government, in the latest budget, introduced a new tax measure under which multiple transactions made by a person from different banks or branches are now treated as single transaction for the purpose of levy of withholding tax.

The official said property transactions are also another major source of revenue collection. Withholding tax rates on buying and sales have been increased by 100 percent. The FBR divides the revenue collection target for the current fiscal year into four quarters.  In the first quarter, the official said the target was set at 18 percent, which would be increased to 23 percent, 26 percent and 33 percent in second, third and final quarters, respectively.  The FBR surpassed the tax revenue collection target of Rs3,104 billion. It actually collected Rs3,115 billion. 

For the fiscal year of 2016/17, the revenue body has been assigned Rs3,621 billion as the collection target, which was 16.24 percent higher than the last fiscal year. The official said large taxpayers units and regional tax offices were already given the quarterly targets to ensure timely collection trough voluntary compliance, audit and recovery.