Pakistan’s tax agency collects Rs458 billion in July 2022

Pakistan’s tax agency collects Rs458 billion in July 2022

ISLAMABAD: Pakistan’s apex tax agency i.e. Federal Board of Revenue (FBR) has collected net revenue of Rs 458 billion during July 2022.

The July collection has exceeded the target of Rs 443 billion by Rs 15 billion, according to a statement issued by the FBR on Monday.

This represents a growth of about 10 per cent over the collection of Rs417 billion during the same period, last year. These figures would further improve after book adjustments have been taken into account.

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These collections are the highest ever in the month of July. This outstanding revenue performance is a reflection of FBR’s continued resolve to build further on its growth trajectory achieved during last year.

On the other hand, the gross collection increased from Rs438 billion during July last year to Rs486 billion, showing an increase of 11 per cent.

Likewise, the amount of refunds disbursed during July was Rs28 billion compared to Rs21 billion paid last year, showing an increase of 32 per cent.

This is reflective of FBR’s strong commitment to fast-track refunds and thereby prevent liquidity shortages in the industry.

The significant revenue increase in July is largely the outcome of various policy and revenue measures introduced by the government in Finance Act 2022.

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Unlike in the past, there is a visible focus on taxing the rich and affluent.

Owing to this paradigm shift, the domestic taxes contributed 55 per cent in collection while import taxes remained 45 per cent. This has reversed the trend. Previously taxes at import stage were 52-53 per cent of overall collection.

Likewise, the growth in domestic Income Tax is almost 31 per cent which is a remarkable shift towards direct taxation. Likewise, there is a significant upsurge in Advance Tax collected during July.

There is also 118 per cent increase in Advance Tax on sale of properties u/s 236-C due to enabling of a withholding provision applicable irrespective of the holding period.

Likewise, 40 per cent increase in Advance Tax u/s 147, especially from banking companies is due to change in tax rate.

Similarly, increase in the rate of FED on cigarettes/tobacco has paid its dividends. The FED from tobacco has registered a record growth of over 47 per cent or Rs 2.6 billion and the corresponding increase in Sales Tax from Tobacco Sector has registered a record 67 per cent growth. The increased FED on International Air Travel has also registered growth of over 200 per cent.

Furthermore, Pakistan Customs has collected Rs. 67 billion under the head of Customs Duty during July 2022 against 65 billion collected during same period last year, registering a marginal growth of 2.58 per cent.

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However, it suffered a dip against the target fixed for July of Rs. 77 billion, which is due import compression policy of the government, aiming to control the outflow of US$. Furthermore, FBR suffered from a loss of about 11 billion in Sales tax against zero rating of POL products.

It is pertinent to mention that Income Tax Returns for Tax Year-2021 have reached 3.4 million compared to 3.0 million in Tax Year-2020, showing an increase of 13 per cent.

The tax deposited with returns during Tax Year 2021 was Rs.76 billion compared to only Rs.52 billion in Tax Year 2020, showing a significant increase of 46 per cent.

Furthermore, building further on its ongoing drive to integrate Tier-1 Retailers across the country, around 23,265 point of sale terminals have been integrated with real time POS reporting system of FBR.

READ MORE: Gwadar customs auctions motor vehicles on July 28, 2022

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