Dec 2022: FBR confident of achieving Rs965bn revenue target sans extra taxation steps

ISLAMABAD: The Federal Board of Revenue (FBR) is confident of achieving the revenue collection target of Rs965 billion during December 2022 without taking additional taxation measures.

Sources told Business Recorder here on Monday that the FBR intended to propose some kind of additional customs duties or enhanced regulatory duties on the import of non-essential items. Another proposal of flood levy is under discussion. However, no such proposal has been finalized yet.

Moreover, no new revenue measures have been finalized taking into account the tax projections for the remaining period of 2022-23.

The tax machinery has exceeded both targets of Rs2,680 billion set for July-November (2022-23) and the monthly target of Rs537 billion for November 2022. The positive growth of direct taxes may enable the tax authorities to achieve the ambitious target of Rs 965 billion during December 2022. The FBR is also confident to achieve the assigned revenue collection target of Rs7,470 billion by the end of current fiscal year.

Breakup of the monthly tax collection target for December 2022 revealed that the income tax target has been set at Rs546 billion showing a growth of 113 percent. Sales tax target has been set at Rs273 billion, reflecting a growth of 20 percent.

‘Flood Levy’: FBR has not drafted any proposal

The target of federal excise duty (FED) has been projected at Rs41 billion, requiring growth of 64 percent, and the tax projection of customs duty has been estimated at Rs104 billion, reflecting an estimated growth of 14 percent. According to the FBR’s month-wise tax projections for 2022-23, extraordinary growth of 61 percent would be required in revenue collection during December 2022.

The revenue collection target for December 2022 has been fixed at Rs965 billion requiring extraordinary growth of 61 percent in the last month of the second quarter of 2022-23.

In this connection, the FBR Member Inland Revenue (Operations) and Member Customs (Operations) will brief the Board-in-Council on the strategy to meet the ambitious revenue collection target of Rs965 billion during December 2022.

According to the sources, FBR Member Inland Revenue (Operations) Amjad Zubair Tiwana and FBR Member Customs (Operations) Mukarram Jah Ansari will give separate presentations to the tax authorities for meeting the assigned monthly target for the current month.

The government has committed to the International Monetary Fund (IMF) to take contingency measures at the earliest signs of fiscal programme underperformance including: (i) immediate increase in the general sales tax (GST) on fuel, as a prelude to reaching the standard rate of 17 percent; (ii) further streamlining of GST exemptions including sugary drinks (Rs60 billion) and other unwarranted exemptions such as those benefiting exporters; and/or (iii) increasing Federal Excise Duty on Tier I and Tier II cigarettes by at least Rs 2/stick with immediate effect to raise at least another Rs 120 billion in revenue.

Copyright Business Recorder, 2022