FBR Flunks Collection Target by Almost 17.57% for April
Federal Board of Revenue (FBR) fall short of its collection target for April by almost 17.57%, or Rs103 billion.
According to provisional data released on Tuesday, the Federal Board of Revenue (FBR) missed its collection target for April by almost 17.57%, or Rs103 billion, due to a steep decline in imports and poor sales tax performance, Dawn reported.
In April, revenue collection stood at Rs483bn as opposed to the target of Rs586bn, resulting in a daunting task for the FBR field formations to make a significant recovery in May-June to achieve the annual target.
However, April's collection posted no growth when compared to last year's Rs483bn. A few more billion may come to the government's coffers when book adjustments are made in the next few days.
As a result, the shortfall broadened to Rs381bn as the whole collection stood at Rs5.638 trillion in 10MFY23 against the mark of Rs6.019tr. The tax authorities, however, recorded a 15.67% growth over Rs4.874tr collected in July-April FY22.
All the development made so far is contrary to what the government projected to IMP of max Rs7.47tr for FY23.
Sales Tax Rate and Excise Duty Increase
On February 14, the FBR raised the sales tax rate from 17% to 18%. Similarly, adding on excise on duty on cigarettes. The revenue forecast in three and a half months from these two efforts is estimated at Rs115bn. The overall new tax measures implemented from March 1 were estimated to raise additional tax payments for the government in the range of Rs170bn in the next three months.
Big Taxpayers Ordered to Deposit 50% of Super Tax
At the same time, the Supreme Court on February 7 also ordered big taxpayers to deposit 50% of their super tax with the FBR.
Impact of Inflation and Depreciation
The impact of over 36% inflation besides the highest-ever depreciation of the rupee is also not reflected in the revenue collection.
Collection from Direct Taxes
The data reveals that in 10MFY23, direct tax collection exceeded its objective by 6.16% and achieved Rs2.514 billion instead of Rs2.368 billion. When compared to the Rs1.750 trillion in revenue from the previous year, a growth of 44% was observed. The collection of the super tax in April in accordance with the Supreme Court's directive is one of the primary causes. In comparison to 10MFY22, when the income tax refund was paid, Rs11bn was increased by Rs3bn to Rs14bn in 10MFY23.
Sales Tax Collection
The amount of sales tax collected increased by 1% to Rs2.089 trillion in 10MFY23 from Rs2.071 trillion in 10MFY22. In comparison to the target of Rs2.369 trillion, the sales tax collection fell short by Rs280 billion (11.81%), or Rs2.089 trillion.
Despite historic inflation and an increase in the GST rate from 17% to 18%, the domestic sales tax collection did not perform well.
Customs Collection
The customs collection fell 6% to Rs752bn in 10MFY23 against Rs798bn last year. This was mainly due to a nearly 29% decline in overall imports in 10MFY23.
