Mohsin Siddiqui (Chief Reporter)
Pakistan has successfully met one of the International Monetary Fund’s (IMF) key conditions for the last loan tranche of $1.2 billion by exceeding the indicative tax collection target, amassing more than Rs4.44 trillion in the initial six months of this fiscal year. As part of an effort to broaden the tax base, tax authorities are set to disconnect utility and mobile phone connections for non-filers, aiming to include over six million individuals in the tax net.
The Federal Board of Revenue (FBR) has collected Rs4.44 trillion, showing a remarkable increase of Rs1.15 trillion or 35% compared to the same period in the previous fiscal year. The FBR remains proactive, with offices and banks operating on weekends, aiming to collect an additional Rs50 billion in the coming days.
According to an agreement with the IMF, the FBR will provide monthly updates on revenue collection progress. In case of a shortfall, the FBR will implement backup measures, including excise duty imposition and sales tax exemption withdrawal.
Despite challenges, the FBR’s management anticipates achieving the Rs9.415 trillion annual target, with the share of direct taxes increasing to 48% in the first half of this fiscal year. Income tax collection performed exceptionally well, reaching Rs2.13 trillion, contributing significantly to offset missed sales tax and customs duty targets.
However, challenges persist in sales tax collection, FED meeting targets, and customs duty falling short. The FBR’s campaign to expand the tax base is ongoing, with 3.6 million income tax returns received, aiming for 6.5 million by June.
The FBR plans to issue a circular next month listing individuals facing utility disconnections due to failure to file returns. Malik Amjad Zubair Tiwana, FBR Chairman, emphasized that action is required against non-filers after the December 28 deadline.
In the tax year 2022, 5.3 million individuals and companies filed returns, with concerns over a low tax-to-GDP ratio highlighted by the World Bank. The FBR underscores the need to enhance revenue generation to support essential public services and socio-economic development initiatives.
The FBR chairman reaffirms the addition of over 1.5 million new taxpayers to the country’s tax base, with ongoing surveys and data collection activities. The FBR aims to bring non-compliant individuals into the tax net in the coming weeks.
