Karachi, December 31, 2023 – The Federal Board of Revenue (FBR), the apex tax collecting agency of Pakistan, has set a historic record by collecting Rs 1 trillion in a single month for the first time in the nation’s history.
The FBR revealed that it amassed a staggering Rs.1021 Billion in tax revenue during December 2023, and after adjusting for Rs.38 billion in refunds issued during the month, the net collection reached an impressive Rs.984 billion.
This monumental accomplishment not only surpassed the monthly targets but also exceeded the goals set for the first six months of the current financial year. The agreed-upon target with the International Monetary Fund (IMF) for the first half of the fiscal year was Rs.4425 billion, and the FBR surpassed this target by Rs.43 billion, recording a collection of Rs.4468 billion.
Comparing this performance to the corresponding six months of the previous year, where the FBR collected Rs.3428 billion, it is evident that there has been a remarkable increase of over 1 trillion. This remarkable achievement is even more notable considering that Rs.230 billion in refunds were issued, compared to Rs.177 billion in the corresponding period of the previous year, along with continuous import compression that has hampered revenues at the import stage.
The ongoing contraction in imports has impacted the revenue mix, shifting it from a 50:50 ratio between import and domestic taxes to 36:64. Remarkably, the FBR has absorbed the entire impact of import compression by generating more revenues domestically. The ratio of direct to indirect taxes has also altered, with the share of direct taxes increasing to 49% for the first six months.
In December alone, the share of direct taxes reached an impressive 59%. This marked an increase of 41% in the first six months compared to the corresponding period of the previous year. Noteworthy is the fact that within direct taxes, the FBR has reduced the share of withholding taxes from 70% to 55-58% over the past two years. However, in December 2023, the share of withholding taxes dropped to as low as 40%.
It is crucial to highlight that back in 2007-08, the FBR achieved an annual collection of 1 trillion, and it took 50 years to reach this milestone. However, in a remarkable feat, the FBR has achieved this figure in a single month, within a span of only 15 years, showcasing the tireless efforts, dedication, and hard work of the field formations and top brass of the FBR.
In acknowledgment of this extraordinary accomplishment, the Chairman of FBR congratulated Member (Customs Operations), Member (IR- Operations), and their teams for their unparalleled efforts. The Chairman also expressed gratitude to the taxpayers, emphasizing that without their continuous support and accurate declarations, this historic target could not have been accomplished. The achievement not only reflects the FBR’s commitment to financial excellence but also underscores the collaborative effort between the tax authorities and the taxpayers.
