The Federal Board of Revenue (FBR) has revealed that it has achieved a remarkable milestone by collecting revenue amounting to Rs5.15 trillion from July 2023 to mid-February 2024.
This represents a substantial 30 per cent increase compared to the same period in the previous fiscal year, according to an official press release.
The report indicates that the growth in tax revenue is attributed to a comprehensive strategy employed by the FBR, with a keen focus on both domestic and import taxes.
Tax refunds during this period witnessed a substantial 28 per cent growth, further contributing to the positive financial trajectory.
A breakdown of the month-wise revenue collection for the period from July 2023 to January 2024 reveals that overall growth in domestic taxes reached an impressive 40 per cent. Concurrently, import duty and related taxes experienced a significant uptick of 16 per cent.
The surge in revenue collection aligns with the revival of the Gross Domestic Product (GDP) and increased scrutiny of FBR’s collection processes.
However, growth in import taxes faced challenges, primarily due to downward adjustments in import tariffs over the years and recent restrictions on import licences imposed by the State Bank of Pakistan to address balance of payments concerns amid foreign exchange constraints.
The report acknowledges that revenue collection from imports incorporates the impact of improvements in import valuations, resulting in an additional Rs151 billion in collections.
Additionally, the anti-smuggling drive witnessed a substantial 69 per cent growth in the fiscal year compared to the previous year (FY 22–23).
Despite these achievements, concerns were raised regarding the decline in the growth of import taxes. This decline is attributed to two main factors: the gradual reduction in import tariffs and recent restrictions on import licenses.
The need for continued efforts in anti-smuggling activities was emphasised, particularly in Baluchistan, where the customs force currently consists of only 378 personnel.
Strengthening the enforcement efforts by increasing personnel in this region was suggested as a potential solution.
The report concludes on a positive note, highlighting that the revenue mobilisation from domestic taxes now accounts for over 64 per cent of the total revenues collected in the current financial year.
Simultaneously, the share of import taxes has decreased to 36 per cent, marking a significant shift from the 50 per cent share observed just three years ago. This indicates a positive trend in the diversification of revenue sources for the FBR.
