The Federal Board of Revenue (FBR) has reported a remarkable surge in the annual collection of sales tax on imports, marking a growth of over 27% during the fiscal year 2020/2021.
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Tax payment with return drops to Rs54 billion in FY21
ISLAMABAD: The voluntary payment along with annual income tax return has dropped to Rs54.09 billion during the fiscal year 2020/2021, according to official data made available to PkRevenue.com
The tax payment with return was Rs56.5 billion during the fiscal year 2019/2020, according to data compiled by the Federal Board of Revenue (FBR).
READ MORE: Requirement of filing income tax return by persons
The primary reason for the decline in voluntary payment in the fiscal year 2020/2021 was a bulk amount was paid along with the returns under the head of the amnesty scheme during the fiscal year 2019/2020.
An amount of Rs19.8 billion under the amnesty scheme was paid with the returns during the fiscal year 2019/2020.
READ MORE: Action against concealed, unexplained income or assets
On the other hand, the collection of tax under Section 137 of the Income Tax Ordinance, 2001 surged to Rs52.62 billion during the fiscal year 2020/2021 as compared with Rs36.23 billion in the preceding fiscal year.
READ MORE: What is due date for tax payment?
Furthermore, the collection under Section 113A of the Income Tax Ordinance, 2001, from small retailers also recorded significant growth to Rs1.43 billion during the fiscal year 2020/2021 when compared with Rs418 million in the preceding fiscal year.
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FBR extends IR working hours for tax collection
ISLAMABAD: The Federal Board of Revenue (FBR) on Tuesday directed offices of Inland Revenue (IR) to observe extended working hours to facilitate taxpayers in payment of duty and taxes.
In an official memorandum, the FBR directed all the IR offices including Large Taxpayers Office (LTOs), Medium Tax Office (MTO), Corporate Tax Offices (CTOs) and Regional Tax Offices (RTOs) to open and observe extended working hours till 9:00 PM on Wednesday September 29, 2021 and till 12:00 midnight on Thursday, September 30, 2021, to facilitate the taxpayers in payment of duties and taxes.
The FBR directed chief commissioners Inland Revenue to establish liaison with the State Bank of Pakistan (SBP) and authorized branches of National Bank of Pakistan (NBP) to ensure transfer of tax collection by these branches on September 30, 2021 to the respective branches of the SBP on the same date so as to account for the same towards the collection for the month of September 2021.
Earlier in the day the SBP also issued instructions to the banks to facilitate the taxpayers in payment of duty and taxes.
The SBP said that the SBP-BSC offices and NBP branches (A, B and C category) shall observe extended banking hours till 8:00 PM and 9:00 PM on September 29, 2021 and September 30, 2021, respectively for collection of government taxes and duties through manual mode as well as Alternate Delivery Channels (ADCs) mode at Over-the-Counter (OTC) facility.
The SBP further said that in order to ensure same day settlement of tax collection on September 30, 2021, following special clearing and settlement will be arranged through M/s. NIFT and 1Link:
a. M/s. NIFT shall arrange special clearing at 7:00 PM on September 30, 2021 for same-day clearing of payment instruments.
b. M/s. 1Link shall arrange to provide the settlement batch of transactions executed through ADCs platform till 10:00 PM on September 30, 2021 to the SBP for settlement in government accounts.
The NBP branches shall settle their transactions of September 30, 2021, with respective SBP-BSC field offices / head office latest by 10:00 PM same day i.e. September 30, 2021.
The SBP said that in order to eliminate the issue of spillover of tax receipts, NBP shall ensure that no instrument concerning government receipts, lodged in aforesaid office hours, shall remain unattended at any NBP branch and shall be settled in the value date of September 30, 2021 through special clearing.
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Tax collection to reach at Rs5.83 trillion in FY22
ISLAMABAD: The finance ministry has estimated that the tax collection to reach Rs5.83 trillion during current fiscal year 2021/2022 (FY22).
In its monthly economic update – August 2021, the finance ministry said that in FY2021, tax revenue increased by 18.4 percent, whereas in July FY2022, tax collection climbed up by 42.5 percent, indicating a good start to the new fiscal year. For FY2022, the tax collection is expected to reach Rs. 5.83 trillion.
“To achieve the target, the government is pursuing a comprehensive tax policy that focuses on expanding the tax base by identifying new taxpayers, gradually eliminating exemptions and concessionary provisions, along with lowering tax rates.”
It said that during FY2021, the fiscal consolidation efforts remained on track. The successful consolidation achieved on the back of prudent expenditure management and revenue mobilization efforts.
For FY2022, the fiscal deficit is expected to reduce further.
These achievements in the fiscal sector are important, especially when Pakistan like the whole world is constantly battling the resurgence of COVID 19.
The persistence in consolidation efforts would pave the way to create fiscal space that would enable the government to withstand any untoward situation.
The Monthly Economic Indicator (MEI) is based on combining monthly data of indicators that are proven to be correlated with GDP at constant prices.
In July 2021, The MEI shows continued strong growth, mainly driven by several factors. First, an expected continued strong YoY growth of LSM in July. Furthermore, as observed in July continued cyclical uptrend in the main trading partners, continued strong growth in imports and deceleration of inflation.
According to Balance of Payments (BoP) data, imports of goods and services spiked in June 2021, but return to normal level in July 2021.
Usually, both June and July, but especially June, are characterized by positive seasonal effects. This positive seasonal impulse is expected to disappear in August.
On the other hand, other factors, such as the recent increases in international oil prices and the ongoing revival of economic growth, may stimulate imports. It is expected that imports of goods and services will settle at around $ 6 billion in August 2021.
Contrary to imports, exports of goods and services, according to BoP data, usually experience negative seasonality during June through September.
The moderation of this seasonal effect, together with the ongoing strong recovery in Pakistan’s main export markets, the momentum in domestic economic dynamism and specific Government policies to stimulate exports are expected to guide exports of goods and services towards the $ 3 billion in August and beyond in subsequent months.
It is expected that trade deficit in goods and services could stabilize to approximately $ 3 billion in August with expectations about remittances to be stabilized around $ 2.5 billion and taking into account the other secondary income and primary income flows, the current account would remain in deficit at moderate monthly levels of around $ 0.5 billion in the coming month.
These expectations depend on the absence of any unexpected negative shocks which may be generated by the potential slowdown of the economic revival abroad (due to loss of confidence, inflation fears, uncertainty for tapering of monetary accommodation and geopolitical risks, etc.). An international and domestic upsurge in COVID-19 infections remains an important risk factor.
The finance ministry said that recent developments in Pakistan’s macroeconomic indicators are positive.
In absence of any major unexpected negative shocks, the economy is moving on a balanced and sustainable growth path.
The challenge remains to elevate this sustainable growth path to a higher level. This requires extending Pakistan’s production capacity and ensuring that a sufficient proportion of this additional production is exported, besides satisfying the needs of domestic consumers.
Enhancing production capacity and increasing its efficiency is not possible without directing a larger proportion of the available and future income towards investments, instead of consumption.
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FBR directed to continue efforts to enhance tax collection
Federal Minister for Finance and Revenue, Shaukat Tarin, has lauded the Federal Board of Revenue (FBR) for achieving record-breaking revenue collection in July 2021, signaling a robust start to the fiscal year.
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FBR collects Rs410 billion; highest ever in July
ISLAMABAD: Federal Board of Revenue (FBR) has posted a robust growth of 48 per cent in the first month of the fiscal year 2021/2022. The collection in July 2021 is the highest collection in the same month of any past year.
The tax collection target for the fiscal year has been set at Rs5,829 billion.
The FBR has provisionally collected Rs410 billion in July 2021 as compared with Rs277.3 billion in the same month of the last year.
The FBR also surpassed the revenue collection target of Rs342 billion set for the month of July 2021.
Prime Minister Imran Khan commended the performance of the FBR in a tweet message. “I commend the efforts of FBR in achieving record revenue collection in July. As of now collection is Rs410 billion which is highest ever in the month of July and around 22 per cent above required target for the month,” the prime minister said.
The prime minister said the revenue collection performance is a reflection of the government’s policies for sustained economic growth and revival.
The provisional collection showed all the heads have recorded significant growth. The FBR collected Rs190 billion as sales tax, Rs135 billion as income tax, Rs22 billion as federal excise and Rs63 billion as customs duty during July 2021.
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Sindh Revenue Board fails to achieve annual collection target
KARACHI: The Sindh Revenue Board (SRB) has missed the revenue collection target of Rs135 billion for fiscal year 2020/2021 and collected Rs128 billion during the year.
However, the collection for 2020/2021 has registered an increase of 21 per cent in revenue collection for fiscal year 2020/2021 despite adverse economic environment due to coronavirus.
The SRB collected Rs128 billion during fiscal year 2020/2021 as compared with Rs106 billion in the preceding fiscal year, a top official said on Thursday.
The official said the growth in revenue collection is impressive considering the general economic slowdown and the resurgence of COVID during the year.
The SRB however missed the revenue collection target of Rs135 billion for the fiscal year under review.
The official that the collection of Rs128 billion includes record receipts of Rs121 billion of Sindh sales tax, representing a growth of 21 percent over the collection of Rs100 billion during 2019/2020.
Collection of Sindh Workers Welfare Fund by SRB during 2020/2021 stood at Rs7 billion as compared to the collection of Rs6 billion during the preceding year, which also represents a growth of 17 per cent.
The official said that the milestone that SRB had reached represented a consistency of achievement since organization’s inception since 2011, courtesy the hard work and steadfastness demonstrated by the workforce beyond the normal call of duty.
The official said that no new tax was levied in the Sindh Budget 2020/2021. The business environment was also significantly unfavorable for the services sector which was hard hit by the COVID-19 throughout the year, forcing partial lockdowns.
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Annual tax collection grows by 18% to Rs4.732 trillion: FBR
ISLAMABAD: Federal Board of Revenue (FBR) has collected Rs4.732 trillion during fiscal year 2020/2021 surpassing the annual target of Rs4.69 trillion by Rs41 billion.
This represents a growth of about 18 per cent over the collection of Rs. 3,997 billion during the same period last year.
The net collection for the month of June was Rs. 568 billion representing an increase of 26 per cent over Rs. 451 billion collected in June 2020.
The year-on-year growth of 18 per cent is unprecedented particularly as it is realized on the heel of 26 per cent growth in June.
These figures would further improve before the close of the day and after book adjustments have been taken into account.
On the other hand, the gross collections increased from Rs. 4,132 billion during this period last year to Rs. 4,983 billion, showing an increase of 21 per cent.
The amount of refunds disbursed was Rs. 251 billion compared to Rs. 135 billion paid last year, showing an increase of 86 per cent. This is reflective of FBR’s resolve to fast-track refunds to prevent liquidity shortages in the industry.
The improved revenue performance is even more significant due to adoption of ‘no-undue’ advances policy as well as effective enforcement by field formations. It is also a reflection of growing economic activities in the country despite facing the challenge of third wave of COVID-19.
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IR offices to remain open till midnight of June 30 for collection of duty, taxes
ISLAMABAD: Federal Board of Revenue (FBR) on Friday said that the offices of Inland Revenue (IR) will observe extended working hours and remain open till mid-night on June 30, 2021 for collection of duty and taxes.
In an official notification the FBR directed all tax offices to observe extended working hours till 12:00 midnight on Wednesday June 30, 2021 to facilitate the taxpayers in payment of duty and taxes.
The FBR directed the chief commissioners of Inland Revenue to establish liaison with the State Bank of Pakistan (SBP) and authorized branches of the National Bank of Pakistan (NBP) to ensure transfer of tax collection by these branches on June 30, 2021 to the respective branches of the SBP on the same date so as to account for the same towards the collection for the month of June 2021.
In another notification, the SBP asked banks to observe extended hours for collection of duty and taxes.
The SBP said that SBP-BSC offices and NBP branches would observe extended banking hours till 8:00 PM on June 30, 2021 for collection of government duties and taxes.
The clearing instruments, collected by SBP-BSC offices and NBP branches till 8:00 PM for payment of government taxes shall be lodged in special clearing to be arranged through NIFT at 8:00PM on June 30, 2021.
The SBP said that the NIFT shall arrange special clearing for same day clearing of payment instruments collected till 8:00PM on June 30, 2021. NIFT shall submit final returns to SBP-BSC offices for settlement by 10:00PM, same day.
M/s. 1Link shall arrange to provide the batches of Alternate Deliver Channels (ADCs) transactions executed till 12:00 AM on June 30, 2021 by 9:00 AM on July 01, 2021 to SBP for settlement.
In order to eliminate the issue of spillover receipts, the NBP shall ensure that no instrument concerning government receipts, lodged in aforesaid office hours, shall remain unattended at any NBP branch and shall be settled in the value date of June 30, 2021 through special clearing.
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FBR collection target may be fixed at Rs5,829 billion for 2021/2022
ISLAMABAD: The government likely to fix Rs5,829 billion as revenue collection target for next fiscal year 2021/2022, sources said on Wednesday.
The tax target for the next fiscal year is around Rs134 billion less than the projected revenue collection by the International Monetary Fund (IMF).
The IMF has projected an amount of Rs5,963 billion as tax collection by the Federal Board of Revenue (FBR) during the next fiscal year.
The sources said that the revenue collection by the FBR during the current fiscal year 2020/2021 has been projected at Rs4,961 billion against the actual revenue target of Rs4,963 billion.
With the current projection of the revenue collection for the current fiscal year, the FBR would need to increase the collection by 24.26 percent to achieve the projected collection target for fiscal year 2021/2022.
The sources said that the revenue collection target for Inland Revenue would be Rs5,044 billion during the next fiscal year as against project revenue collection of Rs3,991 billion during the outgoing fiscal year.
The collection targets for fiscal year 2021/2022 under different heads have been projected as: Income Tax Rs2,182 billion; Sales Tax Rs2,506 billion; Federal Excise Duty Rs356 billion; and Customs Duty at Rs785 billion.