Net revenue

Disappointment expressed on the increase in net income of FBR

The Federal Board of Revenue (FBR) revealed that its net income rose by more than 9% to 489 billion rupees in August, beating the target of 483 billion rupees set for the month.

In the first two months of the current financial year, revenue collection increased by 2.37% to 948 billion rupees against the target of 926 billion rupees. According to Arif Habib Limited, the net collected revenue of Rs 948 billion increased by 10% on an annual basis.

Read more: RBF revenue collection exceeds target for FY22

On the other hand, gross collection increased from Rs 462 billion in August last year to Rs 526, with an increase of 14%. Similarly, reimbursements paid out in August were 37 billion rupees compared to 14.3 billion rupees paid out last year, an increase of 161%.

Additionally, net income tax collection jumped 33% to 165 billion rupees in August from 124 billion rupees last year. Sales tax collection is 218 billion rupees this year compared to 223 billion rupees last year, showing a decline of 2.24%.

Net customs duty collection was 82 billion rupees in August, compared to 77 billion rupees in the same month of the previous year, an increase of 6.49%. Federal excise duty collection was 24 billion rupees compared to 23 billion rupees the previous year, an increase of 4.34%.

However, the RBF’s increase in tax collection was deemed “disappointing” on Twitter by an economist Muzammil Aslam belonging to Pakistan’s Tehreek-I-Insaf party.

“A disappointing tax collection after a 35% devaluation and 25% inflation. Tax collection only increased by 9%,” he said.

In August, inflation in Pakistan hit a new high for the sixth consecutive month, as devastating floods threatened to drive up prices further. Additionally, Pakistan is grappling with the falling rupee and widening fiscal and current account deficits, and the rupee has lost 18% of its value since December 21.

The government imposed heavy taxes on the business community as well as the general public, which created obstacles for everyone. Instead of expanding the tax net, it focused on improving tax collection from existing taxpayers.

Although tax collection has increased, it has caused massive destruction at the micro and macro level.