ISLAMABAD: The Chief Commissioners of LTOs Monday informed Federal Board of Revenue (FBR) Chairman Asim Ahmad that the tax machinery is facing a challenging task to meet the assigned revenue collection target of Rs683 billion during September 2022.
Sources told Business Recorder here on Monday that the FBR chairman chaired the Chief Commissioners conference through the video link from the FBR Headquarters.
The conference was attended by the Chief Commissioners of the LTOs and Medium Tax Offices (MTOs) across the country.
The FBR has so far collected Rs 380 billion revenue till September 19, 2022 and the Board will have to collect another Rs 303 billion in the remaining 11 days of ongoing month for achieving the fixed target of Rs 683 billion for September 2022.
On Monday, the tax authorities devised a strategy in consultations with Chief Commissioners of LTOs and heads of MTUs to maximize the revenue collection. The advance tax installments will become due and the FBR has intensified efforts to meet the desired revenue collection target to avoid contingency revenue measures.
In case the FBR fails to achieve the desired target of Sep 2022, the government would have to take the contingency revenue measures including imposition of sales tax on petroleum products.
According to the sources, the FBR has decided to conduct a study on the impact of floods on revenue collection during September 2022. The study would reveal the estimated revenue impact of floods on the FBR’s collection during the period under review. The said study is in progress at the FBR Headquarters, they added. The tax machinery is facing the challenging task to meet the quarterly target of Rs1,609 billion for the first quarter (July-September) period of the current fiscal year.
Sources said that the supply chain has been affected in certain areas of the country having an impact on the supplies from rural to urban areas. The floods had an impact on the entire supply chain. This would affect the sales tax collection from supplies. The import contraction would also have an impact on revenue collection during the current month. The government’s focus is on relief efforts and exemptions/concessions due to floods.
Keeping in view the losses faced by the country due to floods, the FBR is also working on estimated revenue loss under the said study on floods.
Ahmad, Monday, directed the Chief Commissioners of the LTOs to ensure the achievement of the assigned revenue collection targets for the first quarter of 2022-23.
The Chief Commissioners shared the revenue collection during September 1-18 and estimated collection from September 19-30, 2022.
The tax machinery is required to collect Rs683 billion during September 2022 for meeting Rs1,609 billion target for the first quarter (July-September) period of the current fiscal year.
Through the video link, the FBR reviewed the revenue performance of the big tax offices and medium tax offices. The possible decrease in revenue collection under few heads due to devastating floods was also discussed during the meeting.
So far, the FBR had provisionally collected net revenue of Rs489 billion during August 2022 against the target of Rs483 billion, reflecting an increase of Rs6 billion.
During the first two months of July and August of 2022-23, the FBR has collected Rs948 billion against the assigned revenue collection target of Rs926 billion. So far the Board has surpassed the assigned target by Rs22 billion in the current fiscal year 2022-23.
According to the provisional data, the FBR has collected net revenue of Rs489 billion during August 2022, which has exceeded the target of Rs483 billion against Rs448 billion collected during the same period, last year.
These figures would further improve after the book adjustments have been taken into account.
These collections are the highest ever in the month of August. This outstanding revenue performance is a reflection of the FBR’s resolve to build on its growth trajectory despite floods, zero rating on the POL products, and import compression.
On the other hand, the gross collection increased from Rs462 billion during August last year to Rs526 billion, showing an increase of 14 per cent. Likewise, the amount of refunds disbursed during August was Rs37 billion compared to Rs14.3 billion paid last year, showing an increase of 161 per cent. This is reflective of the FBR’s strong commitment to fast-track refunds and thereby prevent liquidity shortages in the industry.
The significant revenue increase in August is largely the outcome of various policy and revenue measures introduced by the government in the Finance Act, 2022. Unlike in the past, there is a visible focus on taxing the rich and affluent.
Owing to this paradigm shift, the growth in domestic income tax is almost 38 per cent which is a remarkable shift towards direct taxation.
Copyright Business Recorder, 2022