ISLAMABAD: Falling imports and a sharp slowdown in inflation caused the Federal Board of Revenue’s October collection to fall short of its target by Rs101 billion.
According to preliminary data that were made public on Thursday, the primary contributors to the decrease are lower collections at the import stage and lower collections of domestic sales tax.
As compared to the goal of Rs980 billion in October, tax collections reached Rs879 billion, revealing a significant gap of Rs101 billion. However, compared to Rs711bn in the same month last year, it increased by 24 percent.
In comparison to the anticipated goal of Rs3.632 trillion for July through October, collection in the first four months of FY25 was Rs3.442 trillion, a deficit of Rs190 trillion, or 5.23 percent.
However, revenue for the first four months was Rs2.752 trillion, a 25 percent increase from the previous year.
In the first four months, the FBR reimbursed taxpayers for Rs169 billion, a 6.28 percent increase from Rs159 billion in the same period last year. The FBR issued refunds worth Rs23 billion in October, compared to Rs30 billion in the same month last year, a decrease of 23.33 percent.
According to an official announcement, all exporters’ pending sales tax refund payment orders in the amount of Rs32 billion, which must be processed faster by September 30, 2024, will be distributed on November 1.
The government’s revenue target for FY25 was Rs12.913 trillion, 40 percent more than what was collected in FY24. The government anticipates generating Rs3.659 trillion in additional revenue from three primary sources.
In FY25, the government projects an increase in revenue of Rs1.863 trillion from GDP growth of 3 percent, Large-Scale Manufacturing expansion of 3.5 percent, inflation of 12.9 percent, and import growth of 16.9 percent.
In comparison to the anticipated target of Rs12.913 trillion, independent economists anticipate that real revenue collection in FY25 will be approximately Rs12 trillion.
In the first half of FY25, the total amount of taxes collected may fall short of the goal by Rs320 billion. Reduced import stage and domestic sales tax collection will primarily account for this drop in collection. The main option for the public authority is expanding consistence and bringing brokers inside the expense net.
Statistics indicate that customs duty will decrease by Rs41 billion and sales tax will decrease by Rs290 billion from the anticipated target during the second quarter (October to December). Domestic sales tax is expected to be collected at Rs123 billion less than expected in the second quarter due to lower inflation.
Income tax is the only tax that is working, and it is expected to generate an additional Rs225 billion in Q2 over the target.
Income tax collections exceeded the target of Rs1.415 trillion in the first four months by Rs201 billion. In the first four months of the current fiscal year, sales tax collections fell short of the target by Rs213 billion, or Rs1.236 trillion.
The customs collection also fell short of the goal by Rs96 billion, coming in at Rs376 billion during the review period. The excise duty collection shortfall was Rs82 billion.
