Islamabad, February 20, 2024 – The Federal Board of Revenue (FBR) has achieved a remarkable 30 percent growth in tax collection by mid-February 2024, as reported in the latest data released by the Finance Ministry.
The FBR successfully collected Rs.5.150 trillion from July 2023 to mid-February 2024, showcasing a significant increase compared to the Rs.3.973 trillion collected during the same period in the previous fiscal year.
According to a press statement issued by the Finance Ministry on Tuesday, the growth in tax refunds was noteworthy, reaching over 28 percent during this period. The overall growth in domestic taxes stood at an impressive 40 percent, while import duty and related taxes experienced a commendable 16 percent growth from July 2023 to January 2024.
The surge in revenues is attributed to the revival of the GDP and increased scrutiny on FBR collections. However, the growth in import taxes faced challenges, primarily due to downward adjustments in import tariffs over the years and recent restrictions on import licenses imposed by the State Bank of Pakistan (SBP) to address balance of payments constraints.
The revenue collection from imports, despite challenges, included the positive impact of improvements in import valuation, resulting in Rs 151 billion in collections. Additionally, an anti-smuggling drive contributed significantly, witnessing an impressive 69 percent growth during the current fiscal year compared to the previous year.
The Finance Ministry’s statement highlighted the need to enhance anti-smuggling efforts, particularly in Baluchistan, where the customs force comprises only 378 personnel compared to the required 20,000. It emphasized that revenue mobilization from domestic taxes had become a predominant source, accounting for over 64 percent of the total revenues collected in the current financial year. Concurrently, the share of import taxes has decreased to 36 percent from over 50 percent just three years ago.
The revenue growth was propelled by various sources of taxation, with income tax collections surging by 40 percent, increasing from Rs. 1,751 billion to Rs. 2,447 billion. Major contributors to income tax included banks, the petroleum and oil lubricants (POL) sector, textile industry, power sector, food industry, and various service sectors.
Sales tax collections also witnessed notable growth, rising by 19 percent from Rs. 1,480 billion to Rs. 1,766 billion. Key sectors driving this growth were the POL industry, power sector, food sector, automotive industry, iron and steel sector, and the chemical industry. Federal excise collections experienced a substantial increase of 61 percent, climbing from Rs. 190 billion to Rs. 307 billion, primarily attributed to taxation on tobacco products, cement industry, beverages, airlines, fertilizers, and the automotive sector.
Customs duty collections expanded from Rs. 552 billion to Rs. 629 billion, marking a growth rate of 14 percent. Major contributors to customs duty included the POL sector, automotive industry, iron and steel sector, electronics industry, and food industry.
In conclusion, the FBR’s consistent and robust tax collection growth reflects positive economic trends, effective fiscal policies, and a concerted effort to address challenges in import taxation and anti-smuggling measures. The Finance Ministry remains optimistic about sustaining this momentum in the coming months.
