‘Payment with returns’: FBR collects mere 4pc of total revenue in FY25

ISLAMABAD: The Federal Board of Revenue (FBR) has collected only 4 percent of the total income tax collection from income tax paid along with the returns during 2024-25.

The FBR’s tax machinery performance is also evident from the fact that the direct taxes recovery from taxpayers totalled at 5 percent of the total income tax collection in 2024-25. This figure is reflecting the actual efforts made by the Inland Revenue officials in the field formations during 2024-25.

The FBR’s new report issued on Thursday disclosed that in FY 2024-25, percentage share of ‘Payment with Returns’ constituted 4 percent of the total Income tax collection, which is the same as witnessed in previous financial year.

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However, the quantum of ‘Payment with Returns’ reached Rs. 221.5 billion, a significant increase from Rs 161.5 billion in the previous financial year, marking a growth of 37.1 percent.

Payments by registered taxpayer: Payment made by registered taxpayers under the income tax regime are of two types: 1) ‘Advance Tax’ submitted periodically during year and 2) ‘Payment with Returns’ submitted once a year. These account for 37 percent of the total Income Tax collection.

This category encompasses payments made at the time of submission of annual Income Tax Returns for FY2024-25. Collection under this category amounted to Rs221.5 billion as compared to Rs. 161.5 billion in the previous financial year, marking an impressive growth of 37.1 percent.

In FY 2024-25, percentage share of ‘Advance Tax’ in direct taxes dropped to 33 percent as compared to 34 percent in previous financial year. However, advance Tax collection reached Rs. 1,893.8 billion, a significant increase from Rs. 1,529.6 billion in the previous financial year, marking a growth of 23.8 percent.

Collection on Demand (CoD): In FY 2024-25, percentage share of ‘Collection on Demand’ in total Income tax collection rose to 5 percent as compared to 3 percent in previous financial year. It comprises of 1) Collection from Arrear Demand and 2) Collection from Current Demand.

The cumulative quantum of Collection on Demand reached to Rs. 266.7 billion, with a significant increase of 110.3 percent as compared to a collection of Rs. 126.8 billion in previous financial year, which is a direct indicator of better enforcement effort of field formation.

Collection from Current Demand rose by 80.1 percent and collection form Arrear Demand rose by 201.1 percent in comparison to previous financial year, the FBR added.

Copyright Business Recorder, 2025