Prime Minister Imran Khan is optimistic that the Federal Board of Revenue (FBR) will ‘comfortably achieve’ the annual tax collection target of Rs5.82 trillion after the authority collected Rs850 billion during the first two months of the current fiscal year.
The FBR exceeded the assigned two-month target of Rs690 billion by over 23%.
In a tweet post on Wednesday, PM Khan said this reflects the growth of 51% in revenue over the same period last year. “At the present rate, annual collection target of Rs5,829bn will be comfortably achieved InshaAllah,” said the prime minister.
Pakistan's ratio of tax revenue to GDP remains one of the lowest among sovereigns, said S&P Global in its latest report. The agency was of the view that improvements in collection will be critical in determining the success of its fiscal reform program.
There’s Rs160bn increase in July-August collection: FBR chief
“Constructive measures including the withdrawal of exemptions and preferential rates under the government's sales tax regime, a rationalisation of income tax thresholds and rates, and the augmentation of Federal Excise Duties, among others, should help to solidify the government's revenue base beginning this fiscal year,” said S&P Global.
The trust level of the taxpayers in the FBR has increased. This is evident from the number of complaints filed with the Federal Tax Ombudsman, which has been drastically decreased: FBR chief
During a press briefing on Tuesday, FBR Chairman Dr Muhammad Ashfaq Ahmed, the newly-installed chief, said that the FBR has provisionally collected Rs850 billion during July-August (2021-22) against the assigned target of Rs 690 billion, reflecting an increase of Rs160 billion.
He also announced his roadmap for restructuring tax machinery and growth of 45 percent in revenue collection in the second month of the current fiscal year.
The FBR has probably collected over 50 percent of taxes from the imports including food items, machinery/equipment, and raw materials, which are ultimately consumed in the domestic manufacturing in the country.
He said that the FBR’s provisional tax collection stood at Rs850 billion during July-August (2021-22) against Rs603 billion in the same period of 2020-21, showing a growth of 41%.
"We are in an enforcement mode," said Ahmed. "The trust level of the taxpayers in the FBR has increased. This is evident from the number of complaints filed with the Federal Tax Ombudsman, which has been drastically decreased. Around 90 percent complaints were related to refunds, which have been addressed. Hardly only 10 percent complaints are left with the FTO Office.”