ISLAMABAD: Due to a strong slowdown in inflation and a decline in imports, the Federal Board of Revenue’s October collection fell Rs101 billion short of its goal.
According to preliminary data provided on Thursday, the decline is mostly due to lower domestic sales tax collection and import stage collection.
Compared to the target of Rs980 billion, tax collection in October came to Rs879 billion, indicating a significant Rs101 billion discrepancy. But compared to Rs711 billion in the same month previous year, it increased by 24%.
Compared to the projected target of Rs3.632 trillion for July–October, the first four months of FY25 saw collection of Rs3.442 trillion, a shortfall of Rs190 billion or 5.23 percent.
Nonetheless, income for the first four months was Rs2.752tr, a 25 percent rise over the same period last year.
In the first four months, FBR paid out Rs169 billion in refunds to taxpayers, a 6.28 percent rise over the Rs159 billion it paid out during the same period previous year. In October, the FBR paid out Rs23 billion in reimbursements, a 23.33 percent decrease from Rs30 billion in the same month the previous year.
According to a formal declaration, exporters’ outstanding sales tax refund payment orders of Rs32 billion that were expedited until September 30, 2024, would be paid out on November 1.
The government set a revenue target of Rs12.913 trillion in the FY25 budget, which is 40% more than what was collected in FY24. According to the government, there would be three primary sources of the Rs3.659 trillion in additional revenue.
The government estimates that in FY25, GDP growth of 3 percent, large-scale manufacturing growth of 3.5 percent, inflation of 12.9 percent, and import growth of 16.9 percent will generate an extra Rs1.863 trillion in income.
Compared to the anticipated target of Rs12.913tr, the independent economists predict that real revenue collection in FY25 will be about Rs12tr.
In the first half of FY25, the total amount of taxes collected might be Rs320 billion less than the goal. Reduced domestic sales tax collection and import stage collection will be the main causes of this drop in collection. The government’s sole option is to increase compliance and include traders in the tax system.
Sales tax and FED at the import stage are predicted to decrease by Rs290 billion from the target in the second quarter (October–December), while customs duty is forecast to decrease by Rs41 billion. It is anticipated that decreased inflation will lead to a domestic sales tax collection of Rs123 billion less than the second quarter’s projected aim.
Income tax is the only tax that is now in effect and is anticipated to produce an extra Rs225 billion over the projected target in Q2.
Income tax revenues in the first four months came to Rs1.616 trillion, which was Rs201 billion more than the target of Rs1.415 trillion. In the first four months of the current fiscal year, sales tax collection fell short of the target by Rs213 billion, or Rs1.236 trillion.
The customs collection, which was Rs376 billion in the months under review, also missed the goal by Rs96 billion. The amount of excise duty that was not collected was Rs82 billion.
