LAHORE: The Federal Board of Revenue (FBR) has projected a shortfall of Rs175 billion for the current fiscal year (2023-24) as the superior courts have suspended new tax measures aimed at wealthy taxpayers.
As of the first eleven months of FY24, the FBR collected Rs8.122 trillion against a target of Rs8.162 trillion. To meet the FY24 target of Rs9.415 trillion, the FBR needs to raise Rs1.253 trillion this month, with June’s target initially set at Rs1.178 trillion but now including an additional Rs75 billion backlog.
According to a news report, the prime minister was informed about the revenue impacted by court decisions, including the suspension of super tax and windfall income tax. Around 90% of the pending cases involve large taxpayers such as banks and multinational corporations.
The tax body is expediting the efforts to collect the due taxes by the end of this month and assistance has been sought from the Attorney General for Pakistan.
The Finance Division, FBR, and IMF have different revenue collection targets for 2024-25, ranging from Rs12 trillion to Rs13 trillion.
The government plans to increase tax rates and remove sales tax exemptions to boost revenue, despite the political sensitivity of such measures.
The FBR estimates autonomous revenue collection to be around Rs11.50 trillion in FY25, with additional measures to be reviewed in consultation with the IMF.
Recent IMF meetings projected the FBR revenue target to be between Rs12.4 trillion and Rs12.6 trillion, while the finance division’s initial estimate for FY25 is Rs13 trillion. The final target will be determined based on inflation and GDP growth figures.
The government is also considering boosting imports and aligning salary slabs with pensioners’ incomes, as suggested by the IMF.
Additionally, the IMF has urged FBR to collect taxes from traders and wholesalers and to focus on sales and income taxes, particularly withholding taxes. Current sales tax exemptions exceed Rs1.2 trillion.
