FBR surpasses Rs1 trillion tax collection milestone in December

In a historic achievement, the Federal Board of Revenue (FBR) announced the unprecedented collection of over Rs1 trillion in December, marking the first instance of such a milestone, as per a press release issued today.

Furthermore, the FBR has set a new record by collecting Rs4.468 trillion in the initial six months of Fiscal Year 2024, indicating a notable increase of over Rs1 trillion when compared to the Rs3.43 trillion collected during the same period in FY23.

Remarkably, the FBR has surpassed its targeted collection for the first half of FY24, which was initially set at Rs4.425 trillion. The government’s ambitious projection for the entire fiscal year stands at Rs9.415 trillion.

Despite challenges such as the issuance of Rs230 billion in refunds, up from Rs177 billion in the corresponding period of the previous year, and sustained import compression, the FBR continues to face obstacles in revenue collection at the import stage.

Traditionally, the revenue mix at the import stage and domestic taxes had a 50:50 ratio. However, this balance has shifted to 36:64, with the FBR mitigating the impact of import compression by generating more revenue domestically.

The ratio of direct to indirect taxes has also experienced a shift, with the share of direct taxes increasing to 49 per cent in the first six months.

Notably, in December alone, direct taxes accounted for 59 per cent, marking a 41 per cent increase in the first six months compared to the previous year.

Within the category of direct taxes, the FBR has reduced the share of withholding taxes from 70 per cent to 55-58 per cent over the past two years. Remarkably, the share of withholding taxes reached as low as 40 per cent in December 2023.

It’s worth noting that the FBR had achieved a Rs1 trillion annual collection back in 2007-08, a milestone that took 50 years to accomplish.

In contrast, the FBR has achieved a comparable feat within a single month after 15 years, underscoring the relentless efforts, unwavering dedication, and hard work demonstrated by the field formations and top leadership of the FBR.