40 percent growth YoY: FBR receives over 2.342 million tax returns till January 31

The Federal Board of Revenue (FBR) has received 2,342,642 income tax returns as on January 31, 2020 for Tax Year 2019 as compared to 1,645,828 returns received for Tax Year 2018, reflecting a growth of 40 percent. According to a statement of the FBR Saturday, the provisional revenue collection figure for January 2020 is Rs 320 billion which is 17% higher than last year whereas the Board has paid refunds of around Rs 120 billion during the current fiscal year against Rs 65 billion paid during the same period in last fiscal year.

The Federal Board of Revenue has released the tax revenue collection figures for the month of January 2020 and the number of returns filed in the Tax Year 2019. According to the official data, the provisional collection figure for January 2020 is 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%. It is wrong to assume that the tax collection is only growing at the speed of nominal GDP growth. In fact the current tax base is dependent on growth of large scale manufacturing, imports and non-food/non-medicine/non-shelter/high-end consumption inflation as well as on wage rate increases and nominal increase after depreciation in corporate profits and not on nominal GDP.

All these indicators are going through macroeconomic adjustment phase and hence tax growth of 17% represents a huge turnaround by FBR in this fiscal year, the official statement said. The last five years data shows 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. 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 officers and top hierarchy of FBR are almost working for 12 hours a day with extremely meager resources to maintain this healthy growth despite all odds.

Number of returns this year has shown a phenomenal increase of 40% over the same date last year which shows trust and faith of people of Pakistan for participation in this national cause. The number of returns for 2018 on 31.1.2019 was 1,645,828 which has increased to 2,342,642 on 31.1.2020 for tax year 2019 returns.

The FBR is conscious of the fact that taxes are a byproduct of economic activity and it does not want to hurt economic activity by evangelical pursuit of taxes. The effort this year has been done in collaboration and with active association of business community it is hoped that this cooperation will go on in coming months.

The FBR has also been very active in removing irritants related to exporters refunds and has issued an unprecedented amount of refunds this year.