ISLAMABAD: The Federal Board of Revenue’s recovery from past income tax arrears totaled at Rs 2.8 billion during 2022-23 as compared to Rs 35 billion in 2021-22, showing a drastic decrease of 91.9 percent.
This astonishing data has been mentioned in a FBR’s report which revealed that the collection out of income tax arrears demands during 2022-23 amounted to Rs 2.8 billion against Rs 35 billion in 2021-22, showing a major decrease of 91.9 percent in collection out of demands.
The collection out of income tax demands has two components i.e. “arrear demands” and secondly “current demands”. The collection from “current demands” showed an increase of 66.8 percent whereas recovery from “arrear demands” witnessed a major decrease of 91.9 percent.
Overall, the FBR has recovered an amount of Rs 144.3 billion under the head of “Income Tax demands” from taxpayers in 2022-23 against Rs 120 billion collected in 2021-22 showing a growth of 20.2 percent.
The FBR’s report revealed that significant efforts were made during 2022-23 to enhance the collection from Income Tax demand outstanding as past arrears and the demand raised during the year.
During 2022-23, overall collection from Collection on Demand (CoD) stood at Rs 144.3 billion against Rs 120.0 billion collected in 2021-22 showing a growth of 20.2 percent. The growth under this head was mainly driven by collection of “current demand” which grew by 66.8 percent although the “arrear demand” showed a significant decline of 91.9 percent.
The major contribution has come from advance tax collection with Rs 945.3 billion in 2022-23 against Rs 569.3 billion in 2021-22, registering a growth of 66 percent. This component includes payments made at the time of submission of annual Income Tax Returns. Under this head Rs 122 billion has been collected during 2022-23 against Rs 79.9 billion in 2021-22, showing a growth of 52.7 percent.
The FBR’s report added that the collection under the head “Direct Taxes” is composed of collection of Income Tax, Workers Welfare Fund/Workers Profit Participation Fund and the Capital Value Tax.
The collection under the head “Income Tax” comprises the Income Tax collected as Withholding Taxes, Advance Tax, Payments with Returns and Collection on Demand.
Copyright Business Recorder, 2023
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