ISLAMABAD: The Federal Board of Revenue (FBR) has suffered a revenue shortfall of Rs 5 billion during April 2022, as provisional revenue collection stood at Rs 480 billion during April 2022 against the assigned monthly target of Rs 485 billion.
The FBR has released the provisional revenue collection figures for the months July, 2021- April, 2022 of current Financial Year 2021-22.
In March, 2022, the FBR had provisionally collected Rs 575 billion during March 2022 against the assigned target of Rs604 billion, reflecting a shortfall of Rs29 billion.
According to the provisional information, FBR has collected net revenue of Rs. 4,858 billion during July, 2021-April, 2022 of current Financial Year 2021-22, which has exceeded the target by Rs. 239 billion. This represents a growth of about 28.6% over the collection of Rs. 3,778 billion during the same period, last year.
The FBR has provisionally collected Rs 4,858 billion during July-April (2021-2022) against the assigned target of Rs 4,619 billion, reflecting an increase of Rs 239 billion.
Now, the FBR is required to collect Rs 621 billion per month in May and June 2022 to meet the upward revised target of Rs 6.1 trillion by the end of current fiscal year.
The net collection for the month of April, 2022 realized Rs. 480 billion representing an increase of 24.9 % over Rs. 384 billion collected in April, 2021. On the other hand, the gross collections increased from Rs. 3,981 billion during July, 2020-April, 2021 to Rs 5,122 billion in current Financial Year July, 2021- April, 2022, showing an increase of 28.7%.
Likewise, the amount of refunds disbursed during April, 2022 was Rs.34.6 Billion while in April, 2021 the refunds disbursed were Rs.19.6 Billion, registering an increase of 76.2%. Similarly, refunds worth Rs 264 billion have been disbursed during July, 2021- April, 2022 compared to Rs 203 billion paid last year, showing an increase of 30.1%.
It is pertinent to mention that the ongoing unprecedented and constant growth trajectory in revenue collection has been achieved despite massive tax relief given by the government on various essential items to common man. For the first time ever in the country’s history, Sales Tax on all POL products has been reduced to zero which cost FBR Rs. 45 Billion in April, 2022.
Likewise, the revenue impact of Sales Tax exemptions provided to Fertilizers, Pesticides, Tractors, Vehicles, and Oil & Ghee come to Rs.18 Billion per month. Similarly, zero rating on Pharmaceutical products has cost FBR Rs. 10 Billion in Sales Tax during the month of April, 2022.
Thus, in aggregate these relief measures have impacted revenue collection by approximately Rs. 73 Billion during the month of April, 2022. Furthermore, the political uncertainty and import compression also negatively impacted revenue collection during April.
The FBR has introduced a number of innovative interventions both at policy and operational level with a view to maximize revenue potential through digitization, transparency, and taxpayers’ facilitation. This has not only resulted in ensuring the ease of doing business but also translated in a healthy and steady growth in revenue collection.
Likewise, the incumbent top leadership of FBR has launched a new culture of clean taxation with a clear focus on collecting only the fair tax and not holding up refunds which are due to be paid.
This has not only fast tracked the process of bridging the trust deficit between FBR and Taxpayers but also ensured the much-needed cash liquidity for business community. That’s precisely why FBR continues to surpass its assigned revenue targets despite challenges and price stabilization measures adopted by the government.
It is pertinent to mention that even though FBR had agreed to a target of Rs. 6100 billion with the IMF, the same was never made a target of FBR. So now FBR would need Rs 484.5 billion per month to achieve the initial target of Rs.5829 billion and Rs 621 billion each in May & June to achieve the revised target of Rs. 6100 billion. The present government is fully determined to collect Rs. 6100 billion in this fiscal year.
Copyright Business Recorder, 2022