ISLAMABAD - The Federal Board of Revenue (FBR) is optimistic to achieve the annual tax collection target of Rs9.4 trillion during the current fiscal year without additional revenue generation measures.
The FBR had collected Rs5150 billion against the target of Rs5115 billion in the first 7 months (July to January) of the current fiscal year. It had collected Rs3973 billion during the corresponding months of the previous year. During January 2024, the FBR collected Rs681 billion against Rs545 billion collected during Jan 2023. It is worth mentioning here that the government has set tax collection target at Rs9.415 trillion for FY24 as against the revised collection of Rs7.2tr in FY23, showing an increase of 30 percent. The FBR would have to collect Rs4.3 trillion in remaining five months (February to June) of the current fiscal year to achieve the annual tax collection target.
An official of the FBR informed that the government would achieve the target without any additional revenue generation measure. He admitted that higher inflation rate is helping in increasing the tax collection. The government had set inflation rate target at 21 percent for the current fiscal year. However, currently it is in the range of 28 to 29 percent, helping in higher tax collection. He said that the International Monetary Fund (IMF) had also expressed satisfaction over the tax collection during the current fiscal year.
Higher tax collection helped in containing the budget deficit. The consolidated fiscal deficit has been recorded at 2.3 percent of GDP (Rs.2407.8 billion) in Jul-Dec FY2024 against 2.0 percent of GDP (Rs.1683.5 billion) last year. While a primary surplus witnessed a continuous improvement due to contained growth in non-mark-up spending relative to markup payments. Primary surplus improved to Rs.1812.2 billion (1.7 percent of GDP) during Jul-Dec FY2024 from the surplus of Rs.889.6 billion (1.1 percent of GDP last year.
Total revenues during Jul-Dec FY2024 grew by 46 percent to reach Rs.6854.0 billion from Rs.4698.9 billion last year. This notable performance is driven by a substantial increase in non-tax collections by 109 percent, reaching Rs.2019.7 billion, and a 30 percent growth in FBR tax collections, amounting to Rs.4469.2 billion during Jul-Dec FY2024. The sharp rise in non-tax collection is largely attributed to higher receipts from mark up (PSEs & others), SBP profit, and petroleum levy.
FBR tax collection increased by 30 percent to Rs 4469.2 billion during Jul-Dec FY2024 against Rs 3428.8 billion last year. Notably, FBR exceeded the assigned target by Rs.44 billion during this period. Within total FBR tax collection, direct taxes grew by 41 percent while indirect tax collection increased by 22 percent. Total expenditures grew by 45 percent to Rs.9261.8 billion during Jul-Dec FY2024 against Rs.6382.4 billion last year. Within total, current spending increased by 41 percent mainly due to a 64 percent rise in markup payments during the first six months of the current fiscal year.