PM Imran commends FBR for achieving 'historic' tax revenue collection in FY20-21

Prime Minister Imran Khan on Friday commended the Federal Board of Revenue (FBR) for achieving historic tax revenue collection totalling more than Rs4 trillion in FY20-21.

"I commend efforts of FBR in achieving historic level of tax revenues of Rs4732 bn in 2020-21 - exceeding target of Rs 4691 bn &18% higher than last year," the premier said in a tweet.

PM Imran added that the tax body's performance was a testament to the 'strong economic revival spurred by (PTI) government's policies'.

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Earlier it was reported that the FBR collected Rs4.725 trillion in taxes in the last fiscal year at a healthy growth rate of 18%, which is better than expectations but lower than the original unrealistic tax target.

Unlike in the past when it used to take huge advances and block refunds, this time the machinery did not use arm-twisting measures and instead relied on enforcement tools that helped it still to show double-digit growth.

During fiscal year 2020-21 that ended on June 30, the FBR collected Rs4.725 trillion – up by Rs727 billion or 18% over the collection in the preceding year, said the provisional figures compiled by the FBR.

However, the collection fell short by Rs238 billion against the original target of Rs4.963 trillion set at the start of the fiscal year.

During his post budget press conference, former finance minister Dr Abdul Hafeez Shaikh had appealed to the provinces that they should make their budgets on realistic assumptions as the Rs4.963 trillion target might not be achieved.

It was the third consecutive year that the FBR missed the original target due to setting targets under assumptions that were beyond the FBR’s control. Cumulatively, the PTI government collected Rs2.4 trillion less than the targets it set during its first three years in power.

Setting unrealistic targets also costs the cash-starved federal government since Balochistan gets its 9.09% share in the federal divisible pool on the basis of the original target instead of the actual collection.

All the three provinces will get their shares on the basis of Rs4.725 trillion and Balochistan will get on the basis of Rs4.963 trillion.

Independent economists and tax experts had been predicting that against the original target of Rs4.963 trillion, the FBR would generate Rs4.5 trillion to Rs4.6 trillion. But 18% growth in revenues has remained better than these expectations.