Inside Financial Markets
FBR collects Rs1.395tr in first quarter - Inside Financial Markets

FBR collects Rs1.395tr in the first quarter

– Dawn News

The Federal Board of Revenue collected Rs1.395 trillion in the first quarter of the current financial year exceeding the target of Rs1.211tr by Rs186 billion, showed provisional data released by the FBR on Thursday.

Comparing with the revenue collection of Rs1.01 trillion in 2020, the revenue collection posted 38pc growth in the first quarter this year.

The revenue collection in September 2021 rose by 31.2 per cent from last year’s Rs408bn. These figures would further improve before the close of the day and after book adjustments have been taken into account.

The revenue collection is mainly driven by 52pc contribution from tax collection at import stage while only 48pc is from domestic taxes. Manufacturing is one of the leading contributors to revenue collection.

Returns filing date extended by two weeks

Finance Minister Shaukat Tarin will hold a meeting with the International Monetary Fund in the middle of the current month for the release of the sixth tranche under the $6bn Extended Fund Facility.

The IMF officials were asking Islamabad to raise tax rates, especially for personal income in the last budget to show growth in revenue collection, which Mr Tarin predicted will be achieved without any additional measures.

The gross collections including refunds and rebates payments increased from Rs1.059tr during July-September 2020 to Rs1.454tr in the current financial year, showing an increase of 37.3pc.

The amount of refunds disbursed was Rs59bn during July-September 2021 compared to Rs49bn paid last year, reflecting an increase of 20.2pc. This is reflective of FBR’s resolve to fast track refunds to prevent liquidity shortages in the industry.

The government, while preparing the budget for the current year, had assured the IMF of raising Rs5.829tr in FY22 against Rs4.721tr collected in FY21.

An official statement said that after collecting over Rs4.7tr and exceeding its assigned revenue targets set for tax year 2020-21, the FBR has successfully maintained the momentum set in July 2021.

Its tax collection posted historic high growth in the first quarter of the current financial year. This performance shows that the FBR is well on its way to achieving the target of Rs5.829tr for the year despite the daunting challenges, compelling constraints posed by the coronavirus pandemic, and sporadic tax cuts announced by the government as relief and price stabilisation measures.

Meanwhile, the FBR has extended the date for filing of income tax returns till Oct 15.

The FBR said the Sept 30 deadline had been extended by 15 days because of “serious technical problems” in its Iris portal for e-filing of tax returns.

The FBR had declared multiple times that the deadline would not be extended. It had, however, directed its chief commissioners of Inland Revenue to “generously grant extensions” for filing income tax returns for another 15 days to the people who faced “hardship of any nature”.

The FBR spokesperson said that 1.850 million income tax returns had been received until now. With returns the FBR received Rs37bn income tax against Rs28bn over the last year, showing an increase of 32pc.

The number of returns will increase further when the figures are finally counted, he said, adding that the FBR received Rs150, 000 returns on Sept 28 and 230,000 returns the next day.

The FBR online systems did not sustain the traffic flow on Sept 30 which led to the choking of the Iris system for four to five hours.

Tax-wise breakup of the first quarter

With the rising import bill coupled with an increase in imports of smuggling-prone items on legal channels, customs collection stood at Rs228bn during the first quarter as against Rs155bn last year, indicating a hefty growth of 47pc. The target projected under customs was Rs189bn for the period under review, which was surpassed by Rs39bn.

Syed Zaki Hussain

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Inside Financial Markets was a joint publication of Pakistan Stock Exchange (PSX)and Society of Technical Analysts Pakistan (STAP)