ISLAMABAD: The Federal Board of Revenue (FBR) has suffered a shortfall of Rs9 billion during January 2024, as the provisional tax collection stood at Rs681 billion during the month against the monthly target of Rs690 billion.
However, the FBR met the overall tax collection target for the first seven months of the current fiscal year.
The government has identified eight contingency revenue measures to generate additional revenue of Rs18 billion per month during 2023-24 in case the monthly FBR revenue falls short of the projected targets during 2023-24.
The FBR has provisionally collected Rs5,150 billion during the first seven months (July-January) 2023-24 against the assigned target of Rs5,115 billion, reflecting an increase of Rs35 billion.
According to the provisional data released by the FBR on Wednesday, the FBR has collected Rs5,150 billion during July-January (2023-24) against Rs3,973 billion during the corresponding months of the previous fiscal year, reflecting an increase of Rs1,177 billion.
The FBR has collected Rs681 billion during January 2024 against the monthly target of Rs690 billion for the said month, reflecting a shortfall of Rs9 billion.
During January 2024, the FBR has collected Rs681 billion against Rs545 billion collected during January 2023, showing a growth of Rs136 billion.
The government under the contingency revenue measures agreed with the International Monetary Fund (IMF) that it would impose federal excise duty (FED) of Rs5 per kilogram on sugar, 18 per cent sales tax on textiles/ leathers (Tier-1) and raise withholding tax rates on certain transactions including contracts/ supplies/ services to generate additional revenue of Rs18 billion per month during 2023-24.
The IMF in its latest report, “First Review under the Standby Arrangement” revealed contingent revenue measures if the monthly cumulative FBR revenue falls short of the projected targets during 2023-24.
The report stated should cumulative monthly revenue significantly under perform, the government will, in consultation with the IMF staff, implement select measures:
(i) Raise the sales tax rate for textiles and leathers tier-1 from its reduced rate of 15 per cent to the standard rate of 18 per cent, expected collection of Rs1 billion per month.
(ii) Implement a FED of Rs5 per kilogramme on sugar, expected collection of Rs8 billion per month.
(iii) Increase advance income tax on import of machinery by one percentage point, expected collection of Rs2 billion per month.
(iv) Increase advance income tax on import of raw materials by industrial undertakings by 0.5 percentage points, expected collection of Rs2 billion per month.
(v) Increase advance income tax on import of raw materials by commercial importers by one percentage point, expected collection of Rs1 billion per month.
(vi) Increase withholding tax on supplies by one percentage, expected collection of Rs1 billion per month.
(vii) Increase withholding tax on services by 1 percentage point, expected collection of Rs1.5 billion per month. And, (viii) increase withholding tax on contracts by one percentage point, expected collection of Rs1.5 billion per month.
Copyright Business Recorder, 2024
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