In a groundbreaking achievement, the Federal Board of Revenue (FBR) surpassed expectations by not only meeting but exceeding its target, collecting an impressive sum of over Rs1 trillion in taxes during the month of December 2023. The meticulous efforts of the FBR resulted in the collection of Rs1,021 billion, and even after factoring in Rs38 billion in issued refunds for the month, a net collection of Rs984 billion was achieved.
This fiscal success extended beyond a single month, as the FBR managed to outperform the agreed-upon target of Rs4,425 billion for the first six months of the current financial year, set in collaboration with the International Monetary Fund (IMF). Surpassing this target by Rs43 billion, the FBR recorded a remarkable total collection of Rs4,468 billion. These accomplishments are particularly noteworthy given the persistent challenges, such as the ongoing contraction in imports impacting revenue at the import stage.
An adaptation to these challenges is evident in the changing revenue mix, with a shift to a 36:64 ratio for import and domestic taxes, showcasing the resilience and flexibility of the FBR. Despite hurdles, the revenue landscape experienced a noteworthy transformation in the ratio of direct to indirect taxes. In the initial six months, direct taxes constituted 49%, with December alone witnessing a significant increase to 59%. Within direct taxes, the FBR successfully reduced the share of withholding taxes from 70% to a range of 55-58% over the past two years, hitting a notable low of 40% in December 2023.
It is worth highlighting the historical context of this achievement. The FBR had previously reached the milestone of collecting 1 trillion annually back in 2007-08, a feat that took half a century to accomplish. However, the FBR’s recent success in achieving this monumental figure in a single month, within a span of just 15 years, is a testament to the unwavering dedication and hard work exhibited by the field formations and top brass of the organization. This accomplishment underscores the remarkable progress and efficiency achieved in tax collection within a relatively short timeframe.
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