FBR collects record Rs872b revenue in January

ISLAMABAD: The Federal Board of Revenue (FBR) reported a record tax revenue collection of Rs872 billion for January, marking a significant 29 per cent increase compared to the same month in the previous year.

The increase in tax revenue comes despite a backdrop of economic challenges, including a 10 per cent reduction in interest rates and a 22 per cent decline in inflation relative to the previous year.

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In January 2024, the FBR collected Rs677 billion in taxes, highlighting a huge growth in revenue collection. The breakdown f the January figures reveals a strong performance across different tax categories.

Income tax collection saw an increase of 28 per cent, while sales tax revenues rose by 29 per cent.

Similarly, federal excise duty collections surged by 34 per cent, and custom duties experienced a growth of 30 per cent. The diverse growth across tax categories shoes FBR’s dogged efforts to ensure compliance and broaden the tax base.

The tax revenue collected in January 2024  accounts for an estimated one-third of the FBR’s target for the third quarter of the fiscal year. Tax officials have expressed confidence in achieving the quarterly goals, bolstered by the positive trends observed in tax collection.

The increase in customs duty collections is particularly significant, as it reflects a revival and growth in economic activities across the inflation-weary country.

For the first seven months of the current fiscal year, tax revenues have increased by 26 per cent compared to the same period last year. The growth in viewed as a positive development, especially in light of the prevailing economic issues.

Tax officials have stated that the effective growth in tax collection, when adjusted for inflation and economic stagnation, points to a substantial rise in the tax-to-GDP ratio.

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The increase is seen as a critical step forward in addressing Pakistan’s long-standing fiscal issues, which have been exacerbated by structured inefficiencies and a narrow tax base.