ISLAMABAD: The Federal Board of Revenue (FBR) amassed Rs. 5.15 trillion in tax revenues from July 2023 to mid-February 2024, compared to Rs. 3.973 trillion collected during the same period in the previous fiscal year. It marked a notable growth of 30% in this fiscal year.
Domestic tax revenues showed an impressive overall growth of around 40%, while import duties and related taxes experienced a 16% increase from July 2023 to January 2024.
The upsurge in revenue collection gained momentum as the GDP rebounded and FBR collections underwent closer scrutiny.
However, growth in import taxes was dampened partly due to downward adjustments in import tariffs over the years and recent restrictions on import licenses imposed by the State Bank of Pakistan (SBP) to address balance of payments constraints amidst foreign exchange limitations.
Nevertheless, revenue collection from imports included the impact of improved import valuation, resulting in a collection of Rs. 151 billion, along with a notable 69% growth in anti-smuggling efforts during the current fiscal year compared to the previous year.
The statement highlighted the need to bolster anti-smuggling measures, particularly by augmenting the customs force in Baluchistan, which currently has only 378 anti-smuggling personnel compared to a requirement of 20,000.
The shift towards revenue mobilization from domestic taxes was commended in the statement, constituting over 64% of the total revenues collected during the current financial year, with the share of import taxes declining to 36% from over 50% three years ago.
This revenue growth was primarily driven by diverse sources of taxation. Income tax collections surged from Rs. 1.751 trillion to Rs. 2.447 trillion, marking a significant 40% increase.
Key contributors to income tax included banks, the petroleum and oil lubricants (POL) sector, textile industry, power sector, food industry, and various service sectors.
Sales tax collections also witnessed notable growth, rising from Rs. 1.480 trillion to Rs. 1.766 trillion, representing a 19% increase. Key sectors driving this growth were the POL industry, power sector, food sector, automotive industry, iron and steel sector, and chemical industry.
Federal excise collections experienced a substantial increase of 61%, climbing from Rs. 190 billion to Rs. 307 billion. This surge was primarily attributed to taxation on tobacco products, cement industry, beverages, airlines, fertilizers, and the automotive sector.
Customs duty collections expanded from Rs. 552 billion to Rs. 629 billion, marking a growth rate of 14%. Major contributors to customs duty included the POL sector, automotive industry, iron and steel sector, electronics industry, and food industry.
I am an experienced writer, analyst, and author. My exposure in English journalism spans more than 28 years. In the past, I have been working with daily The Muslim (Lahore Bureau), daily Business Recorder (Lahore/Islamabad Bureaus), Daily Times, Islamabad, daily The Nation (Lahore and Karachi). With daily The Nation, I have served as Resident Editor, Karachi. Since 2009, I have been working as a Freelance Writer/Editor for American organizations.
