Pakistan Revenue Agency collects 458 billion rupees in July 2022
ISLAMABAD: Pakistan’s supreme revenue agency i.e. Federal Board of Revenue (FBR) collected a net income of Rs 458 billion in July 2022.
July’s collection exceeded the Rs 443 billion target of Rs 15 billion, according to a statement released by the FBR on Monday.
This represents a growth of about 10% compared to the collection of 417 billion rupees during the same period last year. These figures could still improve after accounting adjustments are taken into account.
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These collections are the highest ever recorded in July. This outstanding revenue performance reflects FBR’s continued drive to continue its growth trajectory achieved over the past year.
On the other hand, gross collection increased from 438 billion rupees in July last year to 486 billion rupees, an increase of 11%.
Similarly, the amount of refunds paid in July was 28 billion rupees compared to 21 billion rupees paid last year, an increase of 32%.
This reflects FBR’s strong commitment to expedite repayments and thus prevent liquidity shortages in the sector.
The significant increase in revenue in July is largely the result of various policy and revenue measures introduced by the government in the 2022 budget law.
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Unlike in the past, the emphasis is visibly on taxing the rich and the have-nots.
Due to this paradigm shift, domestic taxes contributed 55% to collection while import taxes remained at 45%. This reversed the trend. Previously, taxes at the import stage accounted for 52 to 53 percent of overall collection.
Similarly, the growth in domestic income tax is almost 31%, which is a remarkable shift towards direct taxation. Likewise, there is a significant increase in the withholding tax collected in July.
There is also a 118% increase in withholding tax on the sale of properties u/s 236-C due to the activation of a withholding tax provision applicable regardless of holding period.
Similarly, a 40% increase in the withholding tax u/s 147, especially of banking companies, is due to the change in the tax rate.
Similarly, the increase in the FED rate on cigarettes/tobacco paid off. The Tobacco FED recorded a record growth of over 47% or Rs 2.6 billion and the corresponding increase in the Tobacco Sector Sales Tax recorded a record growth of 67%. The FED’s increase in international air travel also saw growth of more than 200%.
Further, Pakistan Customs collected Rs. 67 billion in customs duties during the month of July 2022 against 65 billion collected during the same period last year, registering a marginal growth of 2.58%.
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However, it suffered a decline from the July target of Rs. 77 billion, which is due to the government’s import compression policy, aimed at controlling the outflow of US dollars. In addition, FBR suffered a loss of approximately $11 billion in sales tax from the zero-rating of POL products.
It is relevant to mention that tax returns for the 2021 tax year reached 3.4 million compared to 3.0 million for the 2020 tax year, an increase of 13%.
The tax filed with returns in the 2021 tax year was Rs 76 billion compared to only Rs 52 billion in the 2020 tax year, representing a significant increase of 46%.
Additionally, building on its continued drive to integrate Tier 1 retailers across the country, approximately 23,265 POS terminals have been integrated into FBR’s real-time POS reporting system.
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