ISLAMABAD: The Federal Bureau of Revenue (FBR) has surpassed its envisaged tax collection target by Rs39 billion in the first two months (July and August) 2020 as the tax authorities fetched Rs593 billion revenues against the assigned target of Rs551 billion.
However, the FBR has failed to manage the assigned target of August 2020 as the tax collection stands at Rs293 billion against the fixed target of Rs308 billion. Owing to the marvelous performance of the first month (July 2020) whereby the taxcollection surpassed by Rs57 billion against the target of Rs243 billion, the overall collection so far showed surpassing the desired target.
Independent tax experts say the FBR will have to collect Rs376 billion in September 2020 for achieving the desired tax collection target of Rs969 billion for the first quarter (July-Sept) period of the current fiscal year.
They believe if the FBR failed to surpass the desired target with substantial margin in the first quarter, then the IMF will come up with prescription of a mini-budget in the second half to materialize the desired target of Rs4,963 billion for whole financial year.
According to FBR’s announcement made on Monday night, the FBR collected Rs593 billion against the revenue target of Rs551 billion in first two months of current fiscal year 2020-21. The FBR has released the revenue collection information of first two months of current financial year i.e. July & August-2020.
According to the released information, against the assigned revenue target of Rs551 billion, the FBR has collected Rs593 billion showing an increase of Rs42 billion and 108 percent of the assigned target. The revenue collection in the first two months of previous year 2019-20 was 582 billion whereas it is increased to 593 billion this year.
To redress the hardships of the business community caused by Covid-19, refunds to the tune of Rs30.6 billion have been disbursed collectively in the first two months of FY-2020 compared to the refunds of Rs11 billion during first two months of FY-2019.
Sales Tax refunds are being issued under centralized and automated system called FASTER which is clearing refunds to exporters within 72 hours for the first time as committed by the Government.
The FBR is also engaging with trade and industry to mitigate their genuine grievances. It is proactively reaching out to the trade and industry and resolving their issues. The FBR has also launched an unprecedented crackdown on corruption dismissing and suspending 76 officers and officials since July 2020.
In post-COVID-19 pandemic scenario, the economic activities are now being revived through multiple economic stimuli and reliefs granted in the budget FY-2020-21. Hectic efforts were put up by the customs field formations in respect of collection of duty and taxes, which was otherwise a daunting task owing to the post-COVID-19 pandemic economic constraints, Muharram holidays and heavy rainfall in Karachi.
This heavy rainfall badly affected the customs clearance of imported cargo during the last week of this month and resultantly the revenue collection. According to the official figure, total customs duty collected during first two months of current FY-2020 is Rs92 billion. Sales tax collection at import stage is on the lower side as compared to the corresponding period of the previous year owing again to heavy rainfall in Karachi.
Furthermore, exemption granted in respect of Additional Customs Duty (ACD) on more than 1600 tariff lines in budget FY 2020-21, also subsequently resulted into decrease in sales taxable value.
In line with the vision and directives of the prime minister to curb smuggling, the Federal Board of Revenue (FBR) vigorously launched a countrywide counter-smuggling drive. The FBR accordingly directed its field formations to make all out efforts to intensify anti-smuggling activities.
In pursuance of the aforesaid directions, Pakistan Customs has initiated massive anti-smuggling operations throughout the country and across all terrains that have led to significant seizures of smuggled goods.
During the month of August 2020 alone, the customs seized smuggled goods worth Rs3.95 Billion compared to Rs2.1 billion in August 2019, thus showing an increase of 87.3%. These seized goods included fabrics, cigarettes, foreign currency, POL products, auto parts, foodstuff, narcotics and other miscellaneous goods. Moreover, mega seizures of luxury vehicles, gold, and betel nuts were also effected during the same period.
The customs formations at Quetta, Peshawar and Multan have seized smuggled goods worth Rs1.6 billion, while most of the remaining goods were at Karachi, Lahore and Islamabad.
