The federal government on Wednesday revised the tax collection target for the current financial year 2020-21 by reducing it from Rs4,717 billion to Rs4,691 billion.
A copy of the budget briefings received by The Express Tribune reveals that the federal government had earlier set a target of Rs4,963 billion in the federal budget which has been revised to Rs4,691 billion, reducing the target for direct tax income tax by Rs252.63 billion.
Sources said that the FBR had set a tax collection target of Rs4,963 billion in the budget for the current financial year 2020-21, which was revised to Rs4,717 billion with a reduction of Rs246 billion, which has now been further reduced.
However, Federal Board of Revenue (FBR) officials say efforts are underway to increase tax collection to more than Rs4,700 billion by the end of this financial year.
The government has also reduced the target for income tax collection and federal excise duty while raising the sales tax collection target.
Similarly, the recovery target for Workers Welfare Fund has been increased, while the recovery targets for Workers Profit Partnership Fund and Capital Value Tax have been reduced.
The target for federal excise duty has been reduced by Rs86 billion, while the target for customs duty has been increased to Rs700 billion.
Earlier, provisional results for July-April showed that the FBR collected Rs143 billion more than its revised target. The collection was almost equally made at the import stage where nearly one out of every two rupees was collected.
The FBR collected Rs3.78 trillion in the first 10 months of the current fiscal year as against Rs3.32 trillion in the same period of last fiscal year, registering a growth rate of nearly 14%, according to the provisional results.
The collection was Rs460 billion higher as compared to the same period of last fiscal year.
The FBR managed to exceed the sales tax and customs duty collection targets, but missed the targets of income tax and federal excise duty.
The increasing collection at the import stage and growing reliance on indirect taxes remained the two distinctive features of the FBR’s revenue performance in the first 10 months of current fiscal year.
Indirect taxes have also contributed to higher prices, including those of sugar and edible oil.
Out of Rs3.78 trillion, an amount of Rs1.72 trillion was generated at the import stage on account of income tax, sales tax and customs duty. This was equal to 46% of the total taxes pooled by the FBR in the current fiscal year.
The 10-month collection was Rs143 billion more than its target of around Rs3.64 trillion. However, the Rs3.78 trillion collection is on the basis of a downward revised annual target of Rs4.7 trillion. Parliament had approved the Rs4.963 trillion tax collection target for the FBR.