Prime Minister Imran Khan on Saturday congratulated the Federal Board of Revenue (FBR) for achieving tax collection of Rs1,840 billion for the first quarter of current fiscal year, which is 37% higher than last year.
For the fourth successive month, the FBR sustained a healthy momentum of increase in tax collection, The Express Tribune learnt. It exceeded the July-October target by Rs228 billion, an unprecedented feat for the revenue board that was known for missing targets until a few months ago.
Against the target of Rs1.6 trillion, the FBR provisionally collected Rs1.84 trillion, exceeding the goal by Rs228 billion, according to the FBR officials. The number may slightly go up once final figures are available.
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The collection was also significantly higher than the previous fiscal year but the International Monetary Fund (IMF) remains sceptical about the consistency in FBR’s performance in the long term due to the possibility of slowdown in imports.
“I want to congratulate FBR for achieving tax collection of Rs 1,840bn for July/Oct, which is 37% higher than last year,” the premier wrote on his official Twitter handle.
I want to congratulate FBR for achieving tax collection of Rs 1,840bn for July/Oct, which is 37% higher than last year. Tax in October has surpassed its monthly target set. It is all due to a robust economic performance.
Contrary to propaganda, Income Tax also grew by 32% YoY
— Imran Khan (@ImranKhanPTI) October 30, 2021
He said that tax collection in October surpassed its monthly target and it is all due to a robust economic performance. “Contrary to propaganda, Income Tax also grew by 32% YoY.” he added.
During the first four months of previous fiscal year, the FBR had collected Rs1.34 trillion and it now recorded a nearly Rs500 billion increase at a growth rate of 37%. The annual target of Rs5.829 trillion is within reach.
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However, the IMF and Pakistan discussed over Rs525 billion in additional tax measures and talks boiled down to sales tax exemptions of around Rs400 billion that the fund said should be withdrawn with immediate effect.
Sources said that the IMF was building its case on the assumption that the growing imports – a key source for the exceptionally good performance – would eventually slow down.
The IMF’s argument has some steam in it as the sales tax collection at the domestic stage turned negative during the July-October period while sales tax collection at the import stage soared 79%.
The income tax collection was Rs56 billion higher than the target set for the first four months. The share of income tax in total revenues stood at 34%, which has placed an increased burden on people who have lower capacity to pay.
The Pakistan Tehreek-e-Insaf (PTI) election manifesto had promised to increase the share of direct taxes to 45% from 38%.
The FBR showed 41% growth in sales tax collection in the July-October period due to heavy reliance on import taxes. It collected Rs826 billion in sales tax in four months, up by Rs241 billion. However, the entire increase came at the import stage as the domestic sales tax collection turned negative.