Federal Board of Revenue (FBR) collected Rs2.023 trillion during the first quarter (July-September) of the current fiscal year 2023-24, which is Rs46 billion higher than the IMF’s target of Rs1.977 trillion. This represents a growth of almost 34 percent in tax collection compared to the same period of the previous year.
The positive news extends to Pakistan’s consistent performance in meeting monthly revenue targets, which it has achieved for the third consecutive month. In September alone, the FBR collected Rs815 billion in revenue, representing a substantial increase from the Rs560 billion collected during the same month in the previous year.
A breakdown of tax types reveals significant growth in income tax collection, which amounted to Rs 925 billion during the first three months of the fiscal year. This marks a remarkable 54 percent increase compared to the same period in the previous year. Income tax collection also exceeded the target by Rs145 billion, offsetting shortfalls in sales tax and customs duty.
Sales tax, however, remained a challenge, with collections reaching Rs722 billion, falling short of the target by Rs55 billion. Whereas, Federal Excise Duty (FED) collection showed exceptional growth, amounting to Rs128 billion, surpassing the target by Rs13 billion, with a remarkable 66 percent increase.
Customs duty collection, although 14 percent higher than the previous year at Rs248 billion, still fell short of the target by Rs57 billion. The improvement in collections was attributed to rupee devaluation and increases in commodity prices in the global market.
For the current fiscal year, Pakistan has committed to an ambitious target of collecting Rs9.415 trillion in taxes, with the majority being indirect taxes. While the achievement of quarterly targets is promising, sustaining this momentum and achieving the annual goal will require a combination of policy measures aimed at both direct and indirect tax collection.
Meeting the annual tax collection target of Rs9.415 trillion will require sustained efforts and potential policy reforms to ensure long-term fiscal stability and economic growth.