Islamabad (Commerce Desk) — Despite a modest increase in tax collections, the Federal Board of Revenue (FBR) achieved its Rs1.71 trillion target for the first two months of the current fiscal year, mainly due to higher sales tax receipts.
The situation indicates that the FBR is likely to face several challenges in the coming months in meeting its annual tax collection target.
According to preliminary figures, total tax collections during July and August stood at Rs1.722 trillion, which is Rs55 billion, or 3.3 percent, higher than the same period last fiscal year.
However, this increase was considerably lower than the 17.4 percent growth required to meet the annual target. Nevertheless, the FBR achieved its two-month target by collecting Rs12 billion more than the amount set.
Senior tax officials said that improved collections in July enabled the FBR to meet its overall two-month target, while by Monday evening in August, the department was Rs29 billion short of its target.
A collection target of Rs930 billion was set for August, but the FBR collected around Rs900 billion.
For the current fiscal year, the government and the International Monetary Fund have set an annual tax collection target of Rs15.263 trillion for the FBR. Achieving this target will require a 17.4 percent increase in revenue compared with the previous fiscal year.
Meanwhile, the provinces have expressed willingness to provide more than Rs1 trillion in grants to the federal government for defence and water resource projects, subject to the condition that the FBR achieves the prescribed revenue target of Rs15.263 trillion.