FBR misses tax collection target by Rs98 billion in first two months of FY25

ISLAMABAD: The Federal Board of Revenue (FBR) has acknowledged a significant shortfall in tax collection for the first two months of the fiscal year 2024-25, with a gap of Rs98 billion. The FBR collected a net total of Rs1,456 billion, falling short of the Rs1,554 billion target for July and August.

According to the FBR’s data released on Sunday, the gross revenue collected during this period was Rs1,588 billion. Despite the shortfall, the FBR issued Rs132 billion in refunds to exporters, a 44 per cent increase from the previous year, to help ease their cash flow issues.

Breaking down the tax collection, domestic income tax brought in Rs593 billion, a 36 per cent increase compared to the same period last year. The collection from domestic sales tax also saw a 40 per cent year-on-year growth, reaching nearly Rs314 billion.

Federal Excise Duty (FED) collected Rs86 billion, marking a 13 per cent increase from the previous year. Overall, there was a 35 per cent growth in the collection of domestic taxes.

The data showed that net income tax collection was Rs616 billion for July and August 2024, up from Rs489 billion during the same period in 2023. The net sales tax collection rose to Rs572 billion, compared to Rs473 billion in the previous year. Customs duty collection totaled Rs172 billion, slightly up from Rs166 billion last year.

However, the momentum in tax collection from imports slowed down due to a continued decline in imports. In August 2024, imports decreased by 2.2 per cent in US dollar terms and by 7 per cent in Pakistani Rupee terms compared to August 2023.

High-duty items like vehicles, home appliances, and other consumer goods saw a significant reduction in imports, affecting the collection of Customs duties and other taxes at the import stage. Despite this, there was a modest 4 per cent increase in Customs duties collection, contributing to an overall 21 per cent increase in net revenue compared to the previous year.

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