FY21 tax target requires Rs2,393 billion or 53.4 percent growth in next five months

FY21 tax target requires Rs2,393 billion or 53.4 percent growth in next five months

ISLAMABAD: Federal Board of Revenue (FBR) needs to collect an amount of Rs2,393 billion during next five months of fiscal year 2020/2021 (FY21) to achieve the annual target of Rs4,963 billion.

According to provisional revenue figures released on Saturday, the FBR collected Rs2,570 billion during July – January 2020/2021 as compared with Rs2,416 billion in the corresponding period of the last fiscal year, showing an increase of 6.4 percent.

In order to achieve the revenue collection target the FBR required to maintain 53.4 percent growth in revenue collection during remaining months of the current fiscal year. The FBR collected Rs1,560 billion during February – June of the last fiscal year. However, the revenue body needs Rs2,393 billion in the remaining five months of the current fiscal year.

It is worth mentioning that the revenue collection was adversely affected during March – June 2020/2021 due to spread of coronavirus in the same period. This has cost around Rs500 billion to the revenue collection.

The net collection for the month of January was Rs.364 billion against a target of Rs340 billion, representing an increase of 12.3 percent over last January and 107 percent of the target. This is the first double-digit monthly growth during the fiscal year.

On the other hand, the gross collections increased from Rs.2464 billion to Rs.2699 billion, showing an increase of nearly 10 percent.

The amount of refunds was Rs129 billion compared to Rs69 billion paid last year, showing an increase of 87 percent. This is reflective of FBR’s resolve to fast-track refunds to prevent liquidity issues of the industry.

The improved revenue performance is a reflection of growing economic activities in the country despite facing the challenge of second wave of COVID-19. Going forward, it is expected that this revenue performance would be further strengthened as economic recovery gains more momentum.