FBR faces Rs75 billion shortfall in annual tax collection target

The Federal Board of Revenue (FBR) is currently confronted with a shortfall of Rs75 billion in attaining the revised annual tax collection target of Rs7,200 billion for the fiscal year.

Despite collecting Rs7,125 billion, which falls short of the revised target, the FBR faces a net revenue shortfall of Rs75 billion for the fiscal year 2022-2023.

Originally, the FBR’s annual tax collection target was established at Rs7,640 billion for the outgoing fiscal year, subsequent to the unveiling of the mini-budget in February 2023.

To generate additional revenue, the government implemented various measures, including an increase in the Goods and Services Tax (GST) rate from 17 per cent to 18 per cent, the application of a higher GST rate of 25 per cent on luxury goods, and a 154 per cent rise in the Federal Excise Duty (FED) on cigarettes.

However, over the past four months, the FBR failed to generate the anticipated additional revenue, leading to a downward revision of the revenue collection target from Rs7,640 billion to Rs7,200 billion by the end of June 2023.

Notably, Minister for Finance and Revenues, Ishaq Dar, took to Twitter to highlight the achievement of the highest-ever tax collection for the outgoing fiscal year.

He stated, FBR has collected Rs7,000 billion in taxes for the first time in the country’s history as of June 26, 2023, and expressed optimism that the revenue collection would further increase by June 30, 2023.

It is expected that the FBR will issue a formal statement regarding the revenue collection in due course.