ISLAMABAD: The Federal Board of Revenue (FBR) has created history as it managed to collect over Rs1 trillion in taxes in December 2023, surpassing the target for the month.
According to the top tax collection body, Rs1,021 billion was collected in December 2023 and reached a net collection of Rs984 billion after adjusting refunds of Rs38 billion issued during the month.
Targets for the first six months of the current financial year were also surpassed which was Rs4,425 billion — as agreed with the International Monetary Fund (IMF) — which was surpassed by Rs43 billion and a collection of Rs4,468 billion was recorded.
In the corresponding six months of the previous year, FBR collected Rs3,428 billion, thus registering an increase of more than Rs1 trillion. This is even though refunds of Rs230 billion have been issued against Rs177 billion during the corresponding period of the previous year and continuous import compression.
Contraction in imports continues to impede revenues collected at the import stage. In the past, the revenue mix at the import stage and domestic taxes used to be 50:50. This has now changed to 36:64 and the FBR has absorbed the entire impact of import compression by raising more revenues domestically.
The ratio of direct and indirect taxes has also altered and the share of direct taxes has increased to 49% for the first six months. However, in December alone, the share of direct taxes was recorded at 59%. This share also registered an increase of 41% in the first six months as compared to the corresponding period of the previous year.
Again, within direct taxes, the FBR during the past two years, has reduced the share of withholding taxes from 70% to 55-58%. However, during December 2023, the share of withholding taxes has been recorded as low as 40%.
It would not be out of place to mention that the FBR collected 1 trillion as an annual collection back in 2007-08. It took 50 years to achieve this milestone, whereas, in a span of only 15 years, this feat has been accomplished in a single month through sheer dedication and hard work of field formations and top brass.
