The Federal Board of Revenue (FBR) has seen a 40 percent year on year growth after collecting 2,342,642 income tax returns as of January 31, 2020 for Tax Year 2019. Last year, the board had collected only 1,645,828 returns received for Tax Year 2018.
The total revenue collected for the month of January has been Rs 320 billion which is 17% higher than last year. The figure is likely to increase due to book adjustments and late reporting by offline branches of NBP. The overall numbers are also showing a healthy growth of around 17%.
The current tax base is dependent on the growth of large scale manufacturing, imports and nonfood, non medicine, nonshelter, and high-end consumption inflation as well as on wage rate increases and nominal increase after depreciation corporate profits and not on nominal GDP.
Data from the past five years has revealed that that FBR collects almost 50 to 55% of its taxes at import stage. The import compression has brought growth in this component to almost zero, which is also why the government is mulling a major shift in policy to ease imports.
Read more: Major policy shift on the cards as govt loosens grip on imports
All the growth in taxes is now supported by almost 30% growth in domestic taxes which is an unprecedented growth number in the history of FBR. The FBR has claimed that this is a reflection of their hard work in recent times, and that the 40 pc increase “shows trust and faith of people for participation in this national cause.”
The number of returns for 2018 on 31.1.2019 was 16,45,828 which has increased to 23,42,642 on 31.1.2020 for tax year 2019 returns. The FBR is conscious of the fact that taxes are a by-product of economic activity and it does not want to hurt the economic activity through the evangelical pursuit of taxes.
