February 01, 2024 (MLN): The Federal Board of Revenue (FBR) fell short of its target in January 2024, collecting Rs681 billion instead of the targeted Rs690bn, resulting in a Rs9bn shortfall for the month.
In comparison to the Rs545bn collected during January 2023, FBR’s collection has surged by 24.95% YoY.
The tax collection this month brings the total cumulative collection during the 7MFY24 to Rs5.15 trillion, which is approximately Rs35bn higher than the targeted amount of Rs5.115tr.
It is pertinent to note that FBR's revenue collection during 7MFY23 stood at Rs3.973 trillion, showcasing a notable YoY growth of 29.62%.
The first review report under the Standby Arrangement published by the fund upon the first review of the standby agreement revealed that the government has agreed upon several contingency revenue measures with the IMF in case of a revenue shortfall.
The report said, "Should cumulative monthly revenue significantly underperform, the government, in consultation with IMF staff, would implement selected measures."
If the monthly cumulative FBR revenue falls short of the projected target by 1.5% in Q2, 0.5% in Q3, or 0.1% in Q4, the government will evaluate the adoption of one or more of these contingency measures.
Apart from the FED of Rs5 per kilogram on sugar, it agreed to raise the GST rate for textiles and leathers tier-1 from its reduced rate of 15% to the standard rate of 18%, to generate additional revenue of Rs1bn per month.
Moreover, it has agreed to increase advance income tax on the import of machinery by 1 percentage point to generate an additional revenue of 2bn per month.
Contingency revenue measures also include increasing advance income tax on import of raw materials by industrial undertakings by 0.5 percentage points, with an expected collection of Rs2bn per month.
The report further revealed that the government, if deemed necessary, will increase advance income tax on import of raw materials by commercial importers by 1 percentage point, with an expected collection of Rs1bn per month.
Additionally, it will increase withholding tax on supplies by 1 percent, expecting an additional collection of Rs1bn per month.
In case of a significant shortfall in monthly revenue, the government, in consultation with IMF staff, will increase withholding tax on services by 1 percentage point to generate an additional revenue of PR1.5bn per month.
To enhance revenue further, a 1 percentage point increase in withholding tax on contracts is planned, targeting an additional monthly collection of Rs1.5bn.
Copyright Mettis Link News
Posted on: 2024-02-01T10:50:36+05:00
