ISLAMABAD: In view of the ambitious revenue target and the remaining months of the current fiscal year (February-June), the Federal Board of Revenue will have to strive hard to sustain 26 percent growth in revenue collection to meet the target of Rs2,475 billion.
According to statistics of the ongoing fiscal year, the FBR has recorded a 26 percent growth in revenue collection by collecting over Rs168 billion in January 2014 as compared to Rs132 billion in January 2013. The monthly collection in January 2013 showed an increase of 15.5 percent against January 2012. The provisional growth has given confidence to the tax authorities to further improve revenue collection in the remaining period of 2013-14.
On the other hand, the 26 percent growth in January is being attributed to increase in sales tax rate from 16 to 17 percent and rise in the price of petroleum products. Similarly sales tax collection stood at Rs564.68 billion in July-January 2013-14 as compared to Rs464.155 billion in the same period last year, showing a growth of 21.65 percent.
Another factor behind the rise in revenue collection has been effective monitoring of withholding taxes, checking revenue leakage of sales tax and impact of the budgetary measures. As per major budgetary measures, exemption of the federal excise duty on certain items was withdrawn in budget (2013-14) with enhancement in the rate of sales tax from 16 to 17 percent and imposition of one percent further tax.
The expansion of the scope of withholding taxes and effective monitoring and enforcement strategy contributed to increase in revenue collection during first four months of 2013-14.