The Federal Board of Revenue (FBR) has released the provisional revenue collection figures for the months July-April of the current Financial Year 2021-22.
According to the provisional information, FBR has collected net revenue of Rs. 4,858 billion during July, 2021-April, 2022 of the current Financial Year 2021-22, which has exceeded the target by Rs. 239 billion. This represents a growth of about 28.6 percent over the collection of Rs. 3,778 billion during the same period, last year.
The net collection for the month of April 2022 realized Rs. 480 billion representing an increase of 24.9 percent over Rs. 384 billion collected in April 2021. On the other hand, the gross collections increased from Rs. 3,981 billion during July, 2020-April, 2021 to Rs. 5,122 billion in the current Financial Year, showing an increase of 28.7 percent.
Likewise, the number of refunds disbursed during April 2022 was Rs. 34.6 billion while in April 2021 the refunds disbursed were Rs. 19.6 billion, registering an increase of 76.2 percent. Similarly, refunds worth Rs. 264 billion have been disbursed from July 2021 to April 2022 compared to Rs. 203 billion paid last year, showing an increase of 30.1 percent.
It is pertinent to mention that the ongoing unprecedented and constant growth trajectory in revenue collection has been achieved despite massive tax relief given by the government on various essential items to the common man. For the first time ever in the country’s history, Sales Tax on all POL products has been reduced to zero which cost FBR Rs. 45 billion in April 2022.
Likewise, the revenue impact of Sales Tax exemptions provided to Fertilizers, Pesticides, Tractors, Vehicles, and Oil & Ghee comes to Rs. 18 billion per month. Similarly, zero-rating on Pharmaceutical products has cost FBR Rs. 10 billion in Sales Tax during the month of April 2022. Thus, in aggregate, these relief measures have impacted revenue collection by approximately Rs. 73 billion during the month of April 2022. Furthermore, the political uncertainty and import compression also negatively impacted revenue collection during April.
It is pertinent to mention that even though FBR had agreed to a target of Rs. 6100 billion with the IMF, the same was never made a target of FBR. So now FBR would need Rs. 484.5 billion per month to achieve the initial target of Rs.5829 billion and Rs. 621 billion each in May and June to achieve the revised target of Rs. 6100 billion. The present government is fully determined to collect Rs. 6100 billion in this fiscal year.
It is worth sharing that FBR has introduced a number of innovative interventions both at the policy and operational level with a view to maximizing revenue potential through digitization, transparency, and taxpayers’ facilitation. This has not only resulted in ensuring the ease of doing business but also translated into healthy and steady growth in revenue collection.
Likewise, the incumbent top leadership of FBR has launched a new culture of clean taxation with a clear focus on collecting only the fair tax and not holding up refunds that are due to be paid. This has not only fast-tracked the process of bridging the trust deficit between FBR and Taxpayers but also ensured the much-needed cash liquidity for the business community.
That’s precisely why FBR continues to surpass its assigned revenue targets despite challenges and price stabilization measures adopted by the government.