Corporate sector contributes Rs3,061bn as income tax

ISLAMABAD: The corporate sector contributed Rs 3,061 billion as income tax during 2023-24, according to a new Federal Board of Revenue (FBR) report.

The FBR’s report revealed that the breakdown of tax receipts for fiscal year 2023-24 reflects performance across segments.

Corporate tax receipts led with Rs 3,061 billion, followed by individuals at Rs 1,119 billion, and association of persons (AOPs) contributing Rs 353 billion. This highlights FBR’s success in fostering balanced contributions and enhancing tax compliance.

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According to the report, the revenue performance for FY 2023-24 highlights FBR’s achievements across several tax instruments, with direct taxes leading the way by exceeding the revised target by an impressive margin.

Direct taxes achieved 121.8% of the target, with income tax collections at 121.2% and capital value tax (CVT) outperforming expectations with 125.2%. The Workers Welfare Fund (WWF) and WPPF collections were particularly noteworthy, achieving a remarkable 196.8% of the target, reflecting FBR’s enhanced effectiveness in tapping these revenue streams.

Although sales tax (85.6%) and Customs (83.4%) collections fell slightly short of their respective targets, they still contributed significantly to the overall revenue pool.

The Federal Excise Duty (FED) collections performed steadily, reaching 96.2% of the target, showcasing resilience and adaptability amidst challenging circumstances. These results collectively demonstrate FBR’s strong commitment to ensuring a diverse and robust revenue base, paving the way for fiscal sustainability and economic growth, FBR maintained.

During 2023-24, the figures of Customs Duty also include “Special Customs Duty” amounting to nearly Rs 21.3 Billion that was levied as Export Development Surcharge (EDS) vide Section 11 of Finance Act 1991 on the exportation of the goods and further amended vide Ministry of Finance, Revenue Division’s SRO dated 04-01-2003.

The subject collection was a part of Customs Duties and reconciled by the FBR with the Accountant General of Pakistan Revenue (AGPR) under the Account head B-02203 (Receipts).

However, vide Finance Act 2022, the Export Development Fund (EDF) Act 1999 was amended to provide that inter alia, the EDF shall consist of “whole receipts of Export Development Surcharge.” Due to this amendment, the EDS is now directly transferred by the SBP to the EDF Account.

The above amendments created an ambiguity resulting into non-reconciliation of figures between FBR and AGPR and on the directions of Finance Division’s letter No 1(26)/NTR/2022-71/24 dated 25-01-2024, the matter is still under correspondence between FBR and AGPR, the FBR report added.

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