ISLAMABAD: The federal government is expected to increase the revenue collection target of the Federal Board of Revenue (FBR) from Rs7,004 billion to Rs 7,426 billion for 2022-23, reflecting an increase of Rs 422 billion.
Sources told Business Recorder that the FBR will achieve the upward revised target of Rs 6.1 trillion by the end of current fiscal year. Keeping in view the additional taxation measures to be announced through amendments in the Finance Bill 2022, the tax collection target of the FBR would be increased from Rs7,004 billion to Rs 7,426 billion for 2022-23.
In order to materialise the fixed tax target of Rs7,004 billion, the FBR has projected to generate Rs2,573 billion through direct taxes, and Rs4,431billion in the shape of indirect taxes.
So far, the FBR has provisionally collected net revenue of Rs. 5,349 billion during July 2021-May 2022 against the assigned target of Rs 5,130 billion, reflecting an increase of Rs 219 billion. Now, the FBR has to collect an amount of Rs 751 billion in June 2022 to meet the upward revised target of Rs 6,100 billion. In June 2021, the tax machinery had collected Rs 571 billion.
The FBR has collected net revenue of Rs. 5,349 billion during July 2021-May 2022 of current financial year 2021-22. This represents a growth of about 28.4% over the collection of Rs. 4,164 billion during the same period, last year.
FBR links Rs7004bn revenue collection to economic health, better enforcement
Last week, FBR Chairman Asim Ahmad informed that the net revenue impact of the taxation measures taken in the federal budget (2022-23) is expected to be increased from Rs355 billion to Rs480 billion following a rise in the income tax rates for salaried class of Rs125 billion for 2022-23.
At the conclusion of the Senate Standing Committee on Finance, the FBR Chairman said that the figure of the revenue measures would obviously go up following changes in the tax rates of the salaried class through the amended Finance Bill 2022.
The government has taken taxation measures of Rs440 billion and enforcement measures of Rs200 billion in the budget (2022-23) to meet the annual target of Rs7,004 billion.
Total taxation measures have been proposed at Rs440 billion for 2022-23. Around 75 percent of the taxation proposals are related to direct taxes. The total relief measures stood at Rs85 billion. The net impact of the measures stood at Rs355 billion.
Sales tax/federal excise measures amounted to Rs90 billion, whereas, sales tax relief totalled Rs30 billion. The net impact of the sales tax/federal excise measures stood at Rs60 billion.
The income tax measures have been projected at Rs316 billion, whereas, relief has been provided of Rs49 billion. The net impact of the income tax measures totalled Rs267 billion.
Through amendments in the Finance Bill 2022, if Rs125 billion has been added to the income tax measures, then the total revenue impact of income tax measures comes to Rs441 billion.
The revenue from the administrative and enforcement measures has been estimated at Rs200 billion for 2022-23 as compared to Rs175 billion in 2021-22.
Copyright Business Recorder, 2022