ISLAMABAD: The Federal Board of Revenue (FBR) has exceeded its annual tax collection target, collecting approximately Rs6,125 billion for the fiscal year 2021-22, which ends on June 30, 2022.
The FBR collected more than 52 percent of GST through the import stage, while domestic GST collection decreased. Miftah Ismail, Federal Minister of Finance, tweeted, “As per PM Shehbaz Sharif’s instructions, we paid all processed DLTL claims pending for the last three years a few days ago.” Today, FBR paid all outstanding sales tax, income tax, and export rebate claims. Every single claim that was processed. Alhamdulillah”.
The FBR has exceeded its annual tax collection target, potentially arise to increased imports and a massive depreciation of the currency. When the government failed to collect the petroleum levy in the first half of the current fiscal year, the FBR’s tax collection was revised upward from Rs5.928 trillion to Rs6.125 trillion under IMF conditions on the eve of the completion of the 6th Review under the $6 billion Extended Fund Facility (EFF).
The Federal Board of Revenue (FBR) released the preliminary revenue collection figures for fiscal year 2021-22 late Thursday night, according to an official announcement. During the current fiscal year (July 21-June 22), the FBR collected net revenue of Rs6,125 billion, exceeding the upwardly revised target of Rs6,100 billion by Rs25 billion.
It represents a massive increase of approximately 29.1 percent over the previous year’s collection of Rs4,744 billion. Similarly, gross revenue collection increased from Rs4,996 billion last year to Rs6,460 billion this year, representing a 29.3 percent increase. One of the key features of the FBR’s outstanding performance is the significant increase in direct taxes, which increased by 32% over the previous year.
This is consistent with the government’s policy of enforcing income taxation, thereby reducing indirect taxation. Furthermore, the net income tax collection for the year is Rs2,278 billion, up from Rs1,731 billion last year, while the sales tax collection is Rs2,525 billion, up from Rs1,983 billion last year. The net collection from customs duty this year is Rs1,000 billion, up from Rs747 billion last year, while the collection from federal excise duty is Rs322 billion, up from Rs284 billion last year.
In contrast, the amount of refunds disbursed during the year of Rs335 billion, compared to Rs251 billion paid in the previous year, represents a 33.3 percent increase. Similarly, refunds of Rs105 billion issued in the fourth quarter of this year compared to Rs68 billion issued in the fourth quarter of last year increased by 55.2 percent. Similarly, refunds of Rs39 billion issued in June 2022 increased by 43.8 percent compared to Rs27 billion in June 2021. More than 5,800 taxpayers received refunds in June, up from 3,100 in June of last year. This reflects FBR’s determination to expedite refunds in order to avoid industry liquidity shortages.
Another game-changing initiative by the FBR to capture Large Scale Manufacturing (LSM) across the country via the Track & Trace System (TTS) has already begun to pay off.
Sales tax collection from the sugar sector under the Track and Trade System amounted to Rs26.03 billion during the current crushing season (December 2021-March 2022) compared to Rs19.9 billion during the previous crushing season, representing a 31 percent increase in just four months.
Similarly, sugar production during the current crushing season was 7.85 million tonnes, up from 5.67 million tonnes the previous crushing season, a 39.7 percent increase over the previous year. During the first quarter of the fiscal year 2022-23, the tobacco and fertiliser sectors will also be brought under the TTS.
Accordingly, Pakistan Customs collected Rs 1 trillion during the year against Rs747 billion under the head of customs duty in FY 2020-21 against the assigned target of Rs960 billion and exceeded it by Rs40 billion, representing a significant 34 percent increase. Whereas in June 2022, an amount of Rs115 billion was collected under the head of customs duty against a monthly target of Rs88 billion, representing a 30% increase over the assigned monthly target. Similarly, duty drawbacks issued by Pakistan Customs this year total Rs33 billion, up from Rs24 billion last year.