Pakistan’s tax collection is getting improved as Federal Board of Revenue (FBR) beats its first-quarter target and recording solid year-on-year growth despite tax cuts introduced at the start of the new fiscal year.
FBR collected Rs. 3,083.5 billion in net revenue during July to September, according to provisional figures. The amount was around Rs. 30 billion higher than the Rs. 3,053 billion target set for the quarter. The latest collection is also 7 percent higher than the Rs. 2,889 billion collected during the same period last year.
FBR ended September on a particularly strong footing. The tax authority collected Rs. 1,360.7 billion in net revenue during the month, beating its Rs. 1,343 billion target by around Rs. 18 billion. September’s collection was also 11 percent higher than the Rs. 1,229 billion collected in September last year.
As a result, FBR managed to stay above both its September and first-quarter targets by roughly 1 percent.
The improvement was not limited to net revenue. Before refunds were taken into account, FBR’s gross collection reached Rs. 3,286.7 billion during the first quarter. That compares with Rs. 3,047 billion in the same period last year, showing growth of approximately 8 percent.
At the same time, the government released significantly more money in tax refunds. FBR paid Rs. 203.2 billion in refunds during the first quarter, up from Rs. 159 billion a year earlier. This represents a 28 percent increase. Sales tax refunds rose from Rs. 112 billion to Rs. 130 billion, while income tax refunds increased from Rs. 32 billion to Rs. 51 billion. In September, taxpayers received Rs. 47 billion in refunds, compared with Rs. 35 billion in the same month last year.
Income tax remained a major contributor to the overall collection, generating Rs. 1,437 billion during the first quarter. The figure was 5 percent above the Rs. 1,365 billion collected a year earlier, although it remained slightly below the specific target for the income tax head.
For salaried individuals, income tax rates were reduced across multiple brackets. The government also abolished the 9 percent surcharge on salaries exceeding Rs. 10 million.
