ISLAMABAD: The revenue collection target of the Federal Board of Revenue (FBR) for December 2022 has been fixed at Rs965 billion requiring enormous growth of 61 percent in the last month of the second quarter of 2022-23.
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 in case the FBR meets the tax projection of Rs537 billion in November 2022. If the FBR misses the tax collection target of Rs537 billion in November 2022, the required growth in tax collection during December 2022 would exceed 61 percent.
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. 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.
Revenue shortfall may ‘force’ FBR to tax banking profits as well
The provisional collection during July-October (2022-23) stood at Rs2,149 billion which is in excess by Rs5.4 billion from the target. The target for November-June (2022-23) has been projected at Rs5,321 billion. The required growth in revenue is 21.5 percent to achieve the target of Rs7,470 billion for 2022-23.
The FBR data further revealed that the overall tax collection from imports witnessed a decrease of 0.6 percent during July-October (2022-23). Sales tax collection on imports witnessed three percent decrease during July-October (2022-23) and the Federal Excise Duty (FED) collection witnessed 56 percent decrease at the import stage.
The FBR data highlighted the revenue risks. The sudden policy changes such as removal of fixed sales tax on electricity bills from July 2022. Other revenue risks included declining demand due to inflation, devaluation and high-interest rates, reduced GDP growth, reduced size and spending of the public sector development programme (PSDP), floods and transport disruptions, adding import compression would further enhance in the coming months.
Copyright Business Recorder, 2022