The Federal Board of Revenue (FBR) will have to collect an additional amount of Rs 506 billion in 2016-17 to meet the assigned revenue collection target of Rs 3621 billion for whole fiscal year of 2016-17.
According to the FBR's quarterly review issued here on Tuesday, the revenue target for fiscal year 2016-17 has been fixed at Rs 3621 billion. The required growth is around 16% over the actual collection of Rs 3115 billion during FY 2015-16. In absolute terms, around Rs 506 billion additional revenue will be collected in 2016-17.
It said that the FBR has collected Rs 3,115 billion as provisional collection during FY 2015-16 against Rs 2,590 billion during FY 2014-15 entailing a growth of 20.3%. The revenue target for FY 2015-16 of Rs 3,104 billion has been achieved to the extent of 100.4%. This is a historic occasion as the revenue collection has crossed Rs 3 trillion mark for the first time in the history of the country. An additional amount of Rs 525 billion has been collected over the collection of Rs 2,590 realised in FY 2014-15, which is highest ever increase in a single year.
Furthermore, the tax-GDP ratio has jumped from 9.4% in 2014-15 to 10.5% in 2015-16. The 1.1% increase in tax-GDP ratio in a single year reflects marked improvement over the previous few years. The graph-1 shows the rising trend in the tax-GDP ratio during last three years.
During the FY 2015-16, the growth in tax revenue is mainly driven by customs duties and sales tax imports. The custom duties have recorded a very healthy growth of 32.6%, followed by sales tax (21.7%), income tax (15.6%) and FED (17.5%).
Among the individual taxes, sales tax is the top revenue generation source of the federal tax revenue collection. Sales tax has emerged as major contributor with 43% share to the federal tax collection followed by direct taxes 38%, customs duty 13% and FED 6% during FY 2015-16 (Graph 2). The share of customs duty has increased from 12% FY 2014-15 to 13% in FY 2015-16.
According to month-wise and quarterly growth trends, new fiscal year started with healthy growth of around 20% in July, but it sharply plummeted to less than 2% in August, however rose again to 14.8% in September. The overall growth achieved during quarter-1 was 11.6%. However, in the second quarter the collection started picking up and the month of October recorded a growth of 22.4%, followed by November 24.4% and December 24.3%. The second quarter ended with a growth of 23.8%. As far as, third quarter collection is concerned, the collection grew by 19% as compared to corresponding period of last year. In the 4th quarter the growth trend remained healthy with around 24% higher collection as compared to corresponding period last year. Nonetheless, the overall collection during FY 2015-16 recorded a growth of 20.3%.
The targets of customs duties and sales tax have been surpassed by 116.6% and 7.6%, whereas the targets of direct taxes and FED have been missed. The FBR was allocated a target of Rs 3,621 billion for FY: 2016-17 which is around 16% higher than the collection in FY 2015-16, the FBR added.