In a first, Rs4.143tr revenue collected in 11 months

ISLAMABAD: Pakistan’s top tax machinery on Saturday claimed to have crossed Rs4.143 trillion in 11 months of the current fiscal year against Rs3.536tr collected over the corresponding months of last year indicating a revival of economic activities in the country.

More revenue ranging between Rs15bn and Rs20bn will come into the government kitty in the last two days (May 30-31) of the current month, which will further improve the overall revenue collection in the July-May period of the current fiscal year.

Soon after the revenue collection data was shared with Prime Minister Imran Khan, the premier took to Twitter commending the Federal Board of Revenue (FBR) for crossing a ‘historic milestone’ by collecting more than Rs4 trillion in taxes for the first time in any fiscal year.

PM commends FBR for crossing historic milestone

Mr Khan said the revenue collection was over 18pc higher during this July-May 2021 than the previous year. Such performance reflected the broad-based economic revival spurred by his government’s policies, he said. The gross revenue collection of the FBR rose to Rs4.36bn between July-May FY21 from last year’s Rs3.66bn, reflecting an increase of 19pc. The higher growth reflected that the government doled out refunds to taxpayers as well, he added.

This year Rs216bn refunds were disbursed in 11 months compared to Rs124bn paid last year, showing an increase of 74pc. It clearly shows that the government has adopted a policy to release timely refunds of exporters and resolve their longstanding issue of liquidity.

Special Assistant to Prime Minister on Revenue and Finance Dr Waqar Masood Khan told Dawn that crossing the Rs4tr mark was a psychological barrier for the FBR. He said FBR revenue collection had been around Rs3.8tr for the past three years.

Mr Khan said the growth in revenue collection would further improve by May 31. “We expect substantial revenue in the next two days,” he said, adding normally people paid taxes on the last dates in Pakistan.

The figures improved despite the fact that revenue collection was affected during the weeklong Eid holidays. The production gained acceleration after Eid, which led to higher revenue collection, the PM’s aide said. He hinted at achieving the revenue collection target for the current fiscal year.

The government, while preparing the budget for FY21, had assured the International Monetary Fund (IMF) of raising Rs4.96tr as against Rs3.99tr collected in FY20, a projected increase of 24.4pc. However, the IMF revised downward the revenue target to Rs4.691tr for the current fiscal year. This revised target seems achievable, as the FBR, which was supposed to collect a total of Rs911bn in May and June 2021, will now have to collect over Rs550bn only in the month of June.

For next year, the IMF has proposed revenue collection target for the FBR at Rs5.963tr though Finance Minister Shaukat Tarin has already hinted that the target will be lower than the one proposed by the IMF.

The gross income tax collection during the July-May period stood at Rs1.477tr as against Rs1.34tr over the corresponding period last year, showing an increase of 10.22pc. The income tax collection, however, remained short of target.

Meanwhile, sales tax collection jumped by 28.26pc to Rs1.956tr in the first 11 months of FY21 from Rs1.525tr in the same period of last year. The sales tax collection surpassed the target. The growth came due to a rise in fuel prices, increase in imports and revival of economic activities during the period under review.

Federal excise duty (FED) collections were up 11.55pc to Rs251bn as against Rs225bn last year.

Similarly, customs collection indicating a growth of 18.6pc stood at Rs676bn during the July-May period this year as against last year’s Rs570bn. The customs collection posted an impressive growth indicating revival of economic activities in the country and controlling of smuggling especially in Balochistan.

Published in Dawn, May 30th, 2021

from The Dawn News - Home https://ift.tt/2R4RvZb