KARACHI: The Federal Board of Revenue (FBR) has collected net revenue of Rs4,170 billion during the July-May period, which has exceeded the target of Rs3,994 billion by Rs176bn. This represents a growth of about 18% over the collection of Rs3,549 billion during the same period last year.
The net collection for the month of May was Rs386 billion, against a required increase of Rs214 billion, representing an increase of 69% over Rs229 billion collected in May 2020 and 168% of the target. The year-on-year growth of 69% is unprecedented particularly as it is realised on the heel of 57% in April. 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 Rs3,674 billion during this period last year to Rs4,386 billion, showing an increase of 19.4%. The amount of refunds disbursed was Rs216 billion compared to Rs125 billion paid last year, showing an increase of 42.3%. This is reflective of FBR’s resolve to fast-track refunds to prevent liquidity shortages in the industry.
The improved revenue performance is a reflection of growing economic activities in the country despite the third wave of COVID-19.
However, during the Eid holidays, revenue collection slowed down considerably.
Meanwhile, FBR’s efforts to broaden the tax base are expanding apace. As of May 31, income tax returns for tax year 2020 have reached 2.93 million compared to 2.63 million in the tax year 2019, showing an increase of 11.4%. The tax deposited with returns was Rs52 billion compared to Rs34 billion last year, showing an increase of 55%.
FBR has also released information about Tier-I retailers who have been integrated with the POS system. According to the information, 10,767 sales points have been integrated with ‘Point of Sales Linked Invoicing System’.
Pakistan Customs has collected Rs672 billion under the head of customs duty in the first eleven months of FY 2020-21 against the assigned target of Rs565 billion and exceeded its target by Rs107 billion which is 19% more than the assigned target.
Whereas during May 2021 an amount of Rs64 billion has been collected under the head of customs duty against the monthly target of Rs57 billion which is again 12% more than the assigned monthly target. It is quite important to mention that an amount of Rs107 billion was collected under the head of customs duty in the first 11 months of the current financial year as compared to FY 2019-20 and has shown a growth of 19% as compared to previous financial year.
During May 2021, smuggled goods worth Rs2.6 billion have been seized so far, while in May 2020 smuggled goods worth Rs1.5 billion were seized, thus showing a monthly increase of 74%. Similarly, during the last 11 months (July -May) of the current financial year smuggled goods worth Rs52.5 billion have been seized as compared to Rs40.8 billion in Jul 2019-May 2020 of the last financial year, showing an increase of 29%.
Inland Revenue (IR) and Customs have collected additional revenue of Rs175 billion during FY20-21, out of which Inland Revenue (IR) has added around Rs100 billion. IR enforcement measures include recovery out of arrears, efficient audits, improved monitoring of sales tax, POS integration, broadening of tax base and monitoring of withholding taxes.
Similarly, out of Rs175 billion, the remaining additional Rs.75 billion have come from effective enforcement measures taken by Pakistan Customs. These measures include counter-smuggling operations regarding tea, tyres, textiles, electronics, palm oil, and POL. Besides enforcement measures, effective administrative measures like an auction of goods, control measures against under-invoicing, adjudication of court cases, recovery of arrears, DIRBS and audits have also increased the revenue generation.
During the current FY, the major sectors for the collection of revenue include the auto sector, banks, cement, POL, tobacco and sugar. Tax revenue of Rs108 billion is collected from the auto sector so far which was Rs72 billion in the last year, showing growth of 51 per cent.
Likewise, the revenue of Rs117 billion is collected from the banks in the current year which was Rs87 billion last year exhibiting an increase of 34 per cent. FBR has collected Rs127 billion from the cement sector in the first eleven months which was Rs97 billion last year showing an increase of 31%.
The revenue collected from the POL is Rs577 billion which was Rs516 billion last year, showing an increase of 12 per cent. From the tobacco sector, FBR has collected Rs129 billion revenue which was Rs104 billion last year, showing an increase of 24 per cent. The revenue from the sugar sector was Rs53 billion which was Rs31 billion last year, showing a growth of 74 per cent.
The Customs duty collections in the current year from the major items include vehicles, iron steel and machinery and mechanical appliances. Customs duty of Rs98 billion is collected from vehicles which was Rs52 billion last year, showing an increase of 86 per cent.
Customs duty from iron and steel remained Rs53 billion which was Rs42 billion last year, showing a growth of 24 per cent. Similarly, Customs duty from machinery and mechanical appliances is Rs38 billion which was Rs30 billion last year in the same period, showing a growth of 26 per cent.
Directorate General of Intelligence & Investigation-IR, from July 2020 to May 2021, forwarded 1,491 investigation reports and red alerts to the field formations involving revenue amounting to Rs228 billion.
During the period October 2018 to May 2021, the directorate filed 146 complaints under Anti-Money Laundering Act 2010 where more than Rs52 billion were involved. The directorate seized 7,527 cartons containing over 750 million cigarette sticks during July20-May21.