ISLAMABAD – The Federal Board of Revenue (FBR) has made an historic achievement as it achieved a groundbreaking milestone in tax collection.
In a historic move, the FBR collected an unprecedented Rs1.021 trillion in December 2023, showcasing its financial prowess and resilience in the face of economic challenges.
The achievement not only surpassed the set targets for the month but also exceeded expectations for the first six months of the current fiscal year.
The target for this period, agreed upon with the International Monetary Fund (IMF), was Rs.4425 billion.
However, the FBR exceeded this by Rs43 billion, reaching a commendable collection of Rs.4468 billion.
After adjusting for Rs38 billion in refunds issued during the month, the net collection reached an impressive Rs984 billion, reflecting the FBR’s commitment to robust financial management.
Comparing this to the corresponding six months of the previous year, where the FBR collected Rs.3428 billion, the increase of over Rs1 trillion underscores the agency’s financial acumen and strategic planning.
Despite the challenges posed by issuing refunds totaling Rs.230 billion, in contrast to Rs.177 billion in the corresponding period of the previous year, and persistent import compression impacting revenue, the FBR showcased unwavering determination.
The revenue mix has undergone a significant shift, with the import stage contributing 36%, while domestic taxes constitute a substantial 64%. The FBR absorbed the impact of import compression by generating more revenue domestically, altering the historical 50:50 ratio in favor of domestic taxation.
Further analysis reveals a noteworthy change in the ratio of direct to indirect taxes. Direct taxes now constitute 49% of the total revenue for the first six months, a shift that demonstrates the evolving tax landscape. In December alone, direct taxes accounted for a significant 59% of the collection, marking a remarkable 41% increase in the first six months compared to the previous fiscal year.
In a strategic move, the FBR reduced the share of withholding taxes within direct taxes from 70% to 55-58% over the past two years. In December 2023, the share of withholding taxes reached a historic low of 40%, reflecting the FBR’s commitment to refining its tax policies.
Adding a historical perspective, the FBR achieved an annual collection of 1 trillion back in 2007-08 after 50 years. However, the current feat of reaching this milestone in a single month, December 2023, speaks volumes about the agency’s untiring efforts, sheer dedication, and hard work over a span of just 15 years.
