FBR exceeds nine-month tax collection target

The Federal Board of Revenue (FBR) has surpassed its collection target by Rs247 billion from July to March of the current financial year 2021-22 (H1FY22).

According to the provisional information, FBR has collected net revenue of Rs4,382 billion from July 2021 to March 2022 of the current financial year 2021-22, which has exceeded the target by Rs247 billion. 

This represents a growth of about 29.1 per cent over the collection of Rs3,394 billion during the same period, last year.

Similarly, the net collection for the month of March 2022 realized Rs575 billion representing an increase of 20.5 per cent over Rs477 billion collected in March 2021. 

On the other hand, the gross collections increased from Rs3,577 billion from July 2020 to March 2021 to Rs4,611 billion in the current financial year from July 2021 to March 2022, showing an increase of 28.9 per cent. 

Likewise, the number of refunds disbursed during March 2022 was Rs31.9 billion while in March 2021 the refunds disbursed were Rs26.3 billion, registering an increase of 21.3 per cent.

Similarly, refunds worth Rs229 billion have been disbursed from July 2021 to March 2022 compared to Rs183 billion paid last year, showing an increase of 25.0 per cent.

It is pertinent to mention that the ongoing unprecedented and constant growth trajectory in revenue collection has been achieved despite massive tax relief given by the government on various essential items to the common man. 

For the first time ever in the country’s history, sales tax on all POL products has been reduced to zero which cost FBR Rs45 billion in March 2022. 

Likewise, the revenue impact of Sales Tax exemptions provided to fertilizers, pesticides, tractors, vehicles, and oil and ghee comes to Rs18 billion per month. 

Similarly, zero-rating on pharmaceutical products has cost FBR Rs10 billion in sales tax during the month of March 2022. Thus, in aggregate, these relief measures have impacted revenue collection by approximately Rs73 billion during the month of March 2022. Furthermore, the political uncertainty and import compression also negatively impacted revenue collection during March. 

It is worth sharing that FBR has introduced a number of innovative interventions both at the policy and operational level with a view to maximizing revenue potential through digitization, transparency, and taxpayers’ facilitation. This has not only resulted in ensuring the ease of doing business but also translated into healthy and steady growth in revenue collection. 

Likewise, the incumbent top leadership of FBR has launched a new culture of clean taxation with a clear focus on collecting only the fair tax and not holding up refunds that are due to be paid. This has not only fast-tracked the process of bridging the trust deficit between FBR and taxpayers but also ensured the much-needed cash liquidity for the business community. That’s precisely why FBR continues to surpass its assigned revenue targets despite challenges and price stabilization measures adopted by the government.