ISLAMABAD: The Federal Board of Revenue (FBR) has said that the achievement of the Rs7,004 billion revenue collection target for 2022-23 would largely depend on the performance of the economy and the effective enforcement by FBR.
According to the Tax Expenditure Report-2022 issued by the FBR, it is estimated that the total FBR collection for the next year would be Rs. 7,004 billion However, the revenue collection and achieving of target would largely depend on the performance of the economy against the targets and the effective enforcement by FBR.
The autonomous growth has been applied on base year’s (FY 2021- 22) expected collection (Rs. 6100 billion) for each respective tax, which estimates an increase of Rs. 1004 billion for the FY 2022-23. This addition has been added in the expected collection of FY 2021-22, thus the revenue forecast for FY 2022-23 has been obtained to the tune of Rs. 7,004 billion. The required growth over the expected collection of FY 2021-22, i.e., Rs. 6,100 billion would be 14.8 percent for FY 2022-23.
Tax buoyancy is the ratio of the percentage change in tax revenues (including changes in tax collection due to changes in tax base or tax rate) to percentage change in tax base or GDP, FBR said.
The overall FBR taxes are buoyant and there is a potential for achieving growth in tax revenues provided that macroeconomic indicators are doing well. It is evident from last 20 years data that FBR revenues increased substantially. The tax-wise breakdown reveals that the Income Tax (Domestic) and Sales Tax (Domestic) are most buoyant with 1.16 and 1.12 respective buoyancy values. On the other hand, sales tax (imports), customs and FED have relatively lower buoyancies. In this regard, addressing the issues of narrow base, unnecessary exemptions and under invoicing/ valuation problems at import stage can be instrumental for making these taxes more buoyant, thus enabling the revenue organization to fetch more tax revenues, report added.
Copyright Business Recorder, 2022
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