The Federal Board of Revenue (FBR) made history by hitting Rs. 1.021 trillion in tax collection in December 2023, marking the first time surpassing the Rs. 1 trillion mark in a single month. After adjusting Rs. 38 billion in refunds issued during the month, the net collection stood at Rs. 984 billion.
According to an official statement from the FBR, not only were the monthly targets exceeded, but also the targets set for the first six months of the current fiscal year.
For the initial six months, the target was Rs. 4.425 trillion (as per agreement with IMF), surpassing it by Rs. 43 billion and achieving a collection of Rs. 4.468 trillion. Comparatively, the FBR collected Rs. 3.428 trillion in the corresponding period of the previous year, marking an increase of over Rs. 1 trillion.
Despite issuing refunds of Rs. 230 billion against Rs. 177 billion in the previous year and ongoing import compression, revenue from imports remains restricted. The revenue composition from imports versus domestic taxes has shifted from 50:50 to 36:64, with the FBR compensating for import compression by generating more domestic revenue.
The ratio between direct and indirect taxes has changed, with direct taxes constituting 49% of the revenue in the first six months. In December alone, direct taxes accounted for 59%, showcasing a 41% increase compared to the same period the previous year.
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Within direct taxes, the FBR reduced the share of withholding taxes from 70% to 55-58% over the past two years. However, in December 2023, withholding taxes accounted for as little as 40%.
It’s noteworthy that the FBR achieved a trillion in annual collections back in 2007-08 after 50 years. Remarkably, this feat was accomplished in a single month within a span of just 15 years, reflecting the relentless efforts, dedication, and hard work of FBR’s field formations and leadership.
Chairman FBR commended the teams for their monumental achievement and expressed gratitude to taxpayers, acknowledging their continuous support and accurate declarations vital in meeting this milestone.
