Karachi, January 31, 2024 – The Federal Board of Revenue (FBR) has exceeded expectations by collecting a staggering Rs 5.15 trillion in the first seven months (July – January) of the fiscal year 2023-24, surpassing the assigned target of Rs 5,115 billion.
This achievement reflects an impressive increase of Rs 35 billion, as revealed by provisional data released by the FBR on Wednesday.
The FBR’s proactive revenue collection efforts during the first seven months of the fiscal year highlight a significant improvement compared to the corresponding period in the previous fiscal year. The FBR has collected Rs 5,150 billion during July-January 2023-24, a noteworthy surge from the Rs 3,973 billion collected in the same months of the previous fiscal year, marking a substantial increase of Rs 1,177 billion.
While the overall performance is commendable, the FBR faced a slight setback in January 2024, collecting Rs 681 billion against the monthly target of Rs 690 billion. This resulted in a minor shortfall of Rs 9 billion. However, compared to January 2023, the FBR demonstrated robust growth by collecting Rs 681 billion, a significant increase from the Rs 545 billion collected during the same month the previous year, reflecting a growth of Rs 136 billion.
The government, anticipating potential revenue shortfalls, has implemented eight contingency revenue measures designed to generate an additional Rs 18 billion per month during the fiscal year 2023-24. These measures include the imposition of federal excise duty (FED) of Rs 5 per kilogram on sugar, an 18 percent sales tax on textiles/leathers (Tier-1), and increased withholding tax rates on specific transactions such as contracts, supplies, and services.
These contingency revenue measures were agreed upon with the International Monetary Fund (IMF), and the government remains committed to implementing them in case monthly FBR revenue falls short of the projected targets for 2023-24.
The IMF’s latest report, titled “First Review under the Standby Arrangement,” sheds light on the contingency measures that would be implemented if the monthly cumulative FBR revenue significantly underperforms. These measures include raising the sales tax rate for textiles and leathers tier-1 from 15 percent to the standard rate of 18 percent, with an expected collection of Rs 1 billion per month. Additionally, the report outlines the implementation of FED on sugar, expected to generate Rs 8 billion per month, and increases in advance income tax on imports of machinery and raw materials.
As the FBR continues to navigate the economic landscape, the successful collection during the first seven months of the fiscal year provides optimism for achieving the annual revenue targets. The government’s proactive approach and contingency measures demonstrate a commitment to fiscal responsibility and stability in collaboration with international financial institutions.
