FBR misses collection target for July-August

September 01, 2024 (MLN): The Federal Board of Revenue (FBR) collected Rs1.456 trillion during the first two months of fiscal year 2024-25, falling short by Rs98bn against the projected target of Rs1.554tr, according to figures released by the board.

However, the July-August collection grew 21% compared to Rs1.21tr in the same period last year.

The FBR collected Rs593bn under the head of domestic income tax as compared to Rs437bn in SPLY, thereby showing a growth of 36%.

A year-on-year growth of 40% was achieved in the domestic sales tax with collection of almost Rs314bn.

Around Rs86bn were collected as Federal Excise Duty (FED) showing a year-on-year increase of 13%.

As a result a cumulative growth of almost 35% has been achieved in the collection of domestic taxes.

However, on the import side the same momentum could not be maintained due to continued compression in imports, the FBR said in a statement.

In US$ terms, imports in the country have declined by 2.2% in August 2024 as compared to August 2023.

Similarly, the imports during August 2024 in PKR value also showed a decline of 7% as compared to August last year.

Moreover, the import of high duty items such as vehicles, home appliances, as well as miscellaneous consumer goods such as garments, fabrics, footwear etc have reduced significantly, changing the import mix.

This trend has impacted collection of Customs duties as well as other taxes collected at import stage, FBR said.

Despite a modest increase of 4% in collection of Customs duties, FBR’s overall growth in net collection registered a 21% increase on collection of previous year.

FBR said it is likely to achieve the revenue targets of the first quarter as both the economic activity and imports are expected to show a healthy turnaround in the month of September due to lower policy rate and other interventions being made by the government in recent months.

The board added that growth is also likely to show a significant increase as a result of digitisation and other FBR’s reforms which are currently being very keenly supervised by the Prime Minister and the Finance Minister.

These reforms include end to end monitoring of supply chains, automated production monitoring, POS, AI based data integration, import scanning and strict integrity management of FBR workforce.

FBR is also doing a revamp of it’s business processes to facilitate business growth and ease.

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