ISLAMABAD-The Federal Board of Revenue (FBR) is optimistic to achieve its annual tax collection target without announcing mini budget.
Background discussions with the officials of ministry of finance and FBR have revealed that the government is not considering mini budget for additional revenue generation at this stage. However, it is working for the documentation of the economy and broadening of tax base, which is one of the major demands of the International Monetary Fund (IMF).
“Tax collection is already on track and there is no need of announcing mini budget at this stage,” said an official of the FBR. The government would share the details of first quarter’s tax collection with the IMF later in this month or start of next month for the review under Stand-By Arrangement, he added.
For the first quarter (July to September) of current financial year, the FBR has collected Rs2,041 billion (2022: 1644 billion) against assigned target of Rs1,978 billion thus exceeding the target by Rs63 billion. FBR has also put in exceptional efforts to achieve revenue target for the month of September, 2023. As against a target of Rs. 794 billion, FBR was able to collect Rs. 834 billion (2022: 688 billion), while refunds amounting to Rs. 37 billion were issued compared to Rs. 18 billion issued in September, 2022.
Economic experts believed that more than projected inflation rate and withdrawal of ban on imports are helping in achieving tax collection. Inflation measured through Consumer Price Index was recorded at slightly above 29 percent in first quarter of the current fiscal year. The federal government for the current fiscal year 2023-24 had set an inflation target at 21.5 percent. According to the FBR, severe import compression was witnessed during the month of September, 2023. During previous month, taxes at import stage were collected at Rs. 299 billion whereas during the current month, taxes at import stage were only Rs. 254 billion. FBR was able to make up the shortfall of Rs. 45 billion through domestic taxes especially direct taxes.
It is worth mentioning here that the government has set tax collection target at Rs9.415tr for FY24 as against the revised collection of Rs7.2tr in FY23, showing an increase of 30 percent. The government hopes to achieve the target based on the projected economic growth of 3.5pc, average inflation of 21pc and some revenue measures. The autonomous growth in revenue — to come from GDP growth and inflation — is projected at Rs1.76tr in 2023-24.