The Federal Board of Revenue (FBR) is facing a projected revenue collection shortfall of Rs272 billion for the current fiscal year, according to the International Monetary Fund (IMF).
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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.
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SBP directs banks to extend working hours for duty, tax collection
KARACHI: State Bank of Pakistan (SBP) on Sunday directed all banks to observe extended working hours to facilitate collection of duty and taxes on Monday November 30, 2020.
A notification issued by the central bank, stated that in order to facilitate the collection of government receipts / duties / taxes, it has been decided that the field offices of SBP Banking Services Corporation (SBP-BSC) and authorized branches of National Bank of Pakistan (NBP) will observe extended banking hours till 9:00 PM on November 30, 2020 (Monday) for which purpose a special clearing has been arranged at 6:00 P.M. on the same day by the NIFT.
All banks are, therefore, advised to keep their concerned branches open on November 30, 2020 (Monday) till such time that is necessary to facilitate the special clearing for Government transactions by the NIFT.
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Revenue grows by 3.8 percent; FBR collects Rs1,337 billion in four months
ISLAMABAD: Federal Board of Revenue (FBR) has achieved 3.8 percent growth in revenue collection during first four months of the current fiscal year, a statement said on Monday.
The FBR collected Rs1,337 billion during July – October 2020/2021 as compared with Rs1,288 billion collected in the corresponding period of the last fiscal year.
The breakup of the collection revealed the FBR collected Rs470 billion as income tax, Rs643 billion as sales tax / federal excise duty and Rs81 billion as customs duty during first four months of the current fiscal year.
The gross collection during the first four months was at Rs1,400 billion as compared with Rs1,323 billion in the corresponding period of the last fiscal year.
The FBR collected Rs333 billion during the month of October 2020 as compared with Rs325 billion in the same month of the last year, showing only 2.46 percent growth.
The FBR said that it had issued refunds worth Rs128 billion during first four months of the current fiscal year as compared with Rs52 billion in the same months of the last year.
The FBR issued Rs15 billion in October 2020 as compared with Rs4.5 billion issued in the same month of the last year. The FBR said that despite significant increase in issuance of refunds the collection of revenue was higher in the month of October 2020. The higher amount of refund was released in order to improve economic activities.
The collection of revenue at import stage fell by 2 percent. However, the collection from domestic sources increased by 13 percent.
The FBR said that during the anti-smuggling increased significantly during the first four months of the current fiscal year. In the anti-smuggling activities, the authorities seized goods worth Rs21.48 billion during the period under review as compared with Rs13.4 billion in the corresponding period of the last fiscal year.
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Manual tax collection to be eliminated by January: SBP
KARACHI: The manual collection of taxes will be eliminated by January 2021 and in this regard Federal Board of Revenue (FBR) and State Bank of Pakistan (SBP) have agreed on the timelines.
The central bank in a report said that the timelines were agreed with FBR to gradually eliminate the manual tax collections by January 2021.
“As a first step in this direction, the option of manual tax payment by corporate sector was eliminated from August 2020,” the SBP said.
During 2019/2020, the SBP intensified efforts to digitize government receipts and payments. In order to bring the cost of digital tax payments and manual paper based tax payment, the nominal fee on digital payment of taxes on the tax payers was eliminated which would be absorbed by SBP.
As the fee is nominal as compared to the agency commission, the SBP pays to agent banks for traditional paper based tax collection, the absorption of digital tax payment fee by SBP, will in fact reduce the net cost of tax collections for SBP.
Further, in a significant development in this respect, timelines were agreed with FBR to gradually eliminate the manual tax collections by January 2021. As a first step in this direction, the option of manual tax payment by corporate sector was eliminated from August 2020.
The SBP said that the Alternate Delivery Channels (ADC) system for collection of government taxes is functioning and robustly for different agencies of the federal government and Government of Punjab.
The taxpayers pay their taxes through internet banking, mobile banking, ATMs and Over-the-Counters (OTC) facility of branches of commercial banks across the country.
“Since its launch in March 2018, an aggregate amount of Rs.829 billion of government taxes and duties has been collected.”
In order to promote digital payments of government taxes and duties, SBP with effect from January 1, 2020, eliminated the transaction fee for taxpayers using digital modes for payment of duties and taxes of federal and provincial governments.
Further, to utilize the potential of ADCs system fully, SBP and FBR have agreed to gradually replace the manual payments of FBR’s taxes with the ADCs system starting with corporate taxpayers from first quarter (July – September) of 2020/2021.
Accordingly, payments of FBR’s Taxes by AOPs/Partnerships and individuals will be shifted completely on the ADCs in the Second Quarter and Third Quarter of 2020/2021 respectively.
Similarly, SBP is negotiating with other provincial governments to use this facility for their taxpayers and utilize the umbrella of ADCs for collection of their taxes and levies. Recently, SBP, M/s 1Link and Islamabad Capital Territory Administration (ICTA) have executed a tripartite agreement for extension of ADC system for collection of ICTA taxes and duties.
While negotiation with Finance Department, Khyber Pakhtunkhwa are at advance stage for initiation of online collections, negotiation with other provincial governments will be initiated in FY21. The project will be broadly based on the model already implemented for FBR and Government of Punjab.
After digitization and automation of Person to Government (P2G) payments, SBP and GoP are now working on digitization of Government to Person (G2P) payments.
As a part of G2P digital payments, SBP and Pakistan Customs are working on digitization of Duty Drawbacks refunds to business in the first phase. After digitization of this process, Customs will generate and deliver a message to SBP for payment of refunds directly into the exporter’s bank account upon realization of foreign exchange proceeds of export consignment.
The successful implementation of this project will be a milestone towards digitization of G2P payments and will help in the government’s initiatives for ease in doing business.
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FBR offices to remain open late hours for tax collection
ISLAMABAD: In a bid to assist taxpayers in meeting their obligations before the end of the month, the Federal Board of Revenue (FBR) has directed its Inland Revenue field offices to remain open for extended hours on Wednesday, September 30, 2020. This decision aims to facilitate the payment of duties and taxes on the last day of the month.
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Tax collection target of Rs4.96 trillion for 2020/2021 achievable
ISLAMABAD: Hammad Azhar, Minister for Industries and Production, has said that the tax collection target of Rs4.96 trillion assigned to Federal Board of Revenue (FBR) during next fiscal year is achievable.
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IR offices to observe extended working hours on Feb 28 for revenue collection
KARACHI: The offices of Inland Revenue will observe extended working hours on Friday, February 28, 2020 to facilitate taxpayers in payment of due taxes and filing of tax returns.
The Federal Board of Revenue (FBR) in an office orders issued to Large Taxpayers Units (LTUs) Corporate Regional Tax Offices (CRTOs) and RTOs, directed to observe extended working hours till 10:00PM on Friday February 28, 2020 to facilitate the taxpayers in payment of duties and taxes and filing of Income Tax Returns / Statements.
The chief commissioners have been directed to establish liaison with State Bank of Pakistan (SBP) and authorized branches of National Bank of Pakistan (NBP) to ensure transfer of tax collection by these branches on February 28, 2020 to the respective branches of SBP on the same date so as to account for the same towards the collection for the month of February 2020.
The SBP also issued instructions that NBP branches as well as field offices of the SBP Banking Services Corporation, shall observe extended banking hours up to 8:00PM on February 28, 2020.
The NBP branches will settle their transactions on same day i.e. February 28, 2020 with respective SBP BSC offices for which purpose a special clearing will be arranged at 5:00PM by the NIFT on February 28, 2020.
The NBP shall settle their transactions with SBP BSC field offices/head office latest by 10:00PM on February 28, 2020.
The SBP further said that in order to eliminate the issue of spillover receipts, NBP shall ensure that no instrument containing receipts of the government, shall unattended at any NBP branch and shall be settled in the value date of February 28, 2020 through special clearing.
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FBR advised to enhance monitoring, enforcement for achieving annual targets
ISLAMABAD: The ministry of finance has advised Federal Board of Revenue (FBR) to enhance monitoring and enforcement in order to achieve annual targets.
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IR offices observe extended working hours for collection
ISLAMABAD: The offices of Inland Revenue will observe extended working hours on December 30 and 31, 2019 to facilitate collection of duty and taxes.
Federal Board of Revenue (FBR) issued instructions on Monday directing all Large Taxpayers Units (LTUs) and Regional Tax Offices (RTOs) to observe extended working hours on December 30 and 31, 2019 to facilitate taxpayers in payment of duty and taxes.
Therefore, the IR offices will remain open till 8:00 pm on Monday December 30, 2019 and till 10:00pm on Tuesday December 31, 2019 to facilitate taxpayers.
The tax offices will also help taxpayers in filing their annual income tax returns and statements of assets.