Tag: Direct Taxes

  • FBR surpasses Rs1 trillion tax collection milestone in December

    FBR surpasses Rs1 trillion tax collection milestone in December

    In a historic achievement, the Federal Board of Revenue (FBR) announced the unprecedented collection of over Rs1 trillion in December, marking the first instance of such a milestone, as per a press release issued today.

    Furthermore, the FBR has set a new record by collecting Rs4.468 trillion in the initial six months of Fiscal Year 2024, indicating a notable increase of over Rs1 trillion when compared to the Rs3.43 trillion collected during the same period in FY23.

    Remarkably, the FBR has surpassed its targeted collection for the first half of FY24, which was initially set at Rs4.425 trillion. The government’s ambitious projection for the entire fiscal year stands at Rs9.415 trillion.

    Despite challenges such as the issuance of Rs230 billion in refunds, up from Rs177 billion in the corresponding period of the previous year, and sustained import compression, the FBR continues to face obstacles in revenue collection at the import stage.

    Traditionally, the revenue mix at the import stage and domestic taxes had a 50:50 ratio. However, this balance has shifted to 36:64, with the FBR mitigating the impact of import compression by generating more revenue domestically.

    The ratio of direct to indirect taxes has also experienced a shift, with the share of direct taxes increasing to 49 per cent in the first six months.

    Notably, in December alone, direct taxes accounted for 59 per cent, marking a 41 per cent increase in the first six months compared to the previous year.

    Within the category of direct taxes, the FBR has reduced the share of withholding taxes from 70 per cent to 55-58 per cent over the past two years. Remarkably, the share of withholding taxes reached as low as 40 per cent in December 2023.

    It’s worth noting that the FBR had achieved a Rs1 trillion annual collection back in 2007-08, a milestone that took 50 years to accomplish.

    In contrast, the FBR has achieved a comparable feat within a single month after 15 years, underscoring the relentless efforts, unwavering dedication, and hard work demonstrated by the field formations and top leadership of the FBR.

  • Pakistan reaffirms commitment to $6.5 billion IMF bailout, dismissing rumors of retraction

    Pakistan reaffirms commitment to $6.5 billion IMF bailout, dismissing rumors of retraction

    On Wednesday, Minister of State for Finance and Revenue, Dr Aisha Ghaus Pasha, dismissed rumours of Pakistan retracting from the anticipated $6.5 billion bailout programme with the International Monetary Fund (IMF).

    According to Geo, Pasha clarified that discussions were ongoing between the Federal Board of Revenue (FBR) and the Finance Division, emphasising that Pakistan remained engaged with the IMF. Speculation arose when reports suggested that Pakistan had taken a firm stance against the IMF and refused to share details of the upcoming budget.

    This led to concerns that the financially strained nation was reneging on the deal originally agreed upon by the Imran Khan-led Pakistan Tehreek-e-Insaf (PTI) government.

    Pasha expressed the government’s commitment to continuing the IMF programme, acknowledging the political sacrifices made by the coalition government to meet the Fund’s conditions. Negotiations with the IMF have been aimed at restarting the $6.5 billion bailout programme, which is crucial for Pakistan to avert default.

    During a meeting with journalists after the Senate Standing Committee on Finance, Pasha revealed that the coalition government would present its second budget in the first week of June, marking the second year since assuming power in April. The Finance Bill 2023-24 is scheduled to be presented in the National Assembly on June 9, while the Economic Survey 2022-23 will be released on June 8, according to sources.

    Assuring the public during the briefing, Pasha affirmed that the government would strive to alleviate the burden on the masses amidst these challenging times, as the budget figures were being finalized. However, she cautioned that the situation would remain difficult until the tax-to-GDP ratio reached double digits, emphasizing the necessity of expanding the tax base.

    The state minister disclosed the Ministry of Finance’s plan to transition from indirect taxes to direct taxes, stating that such a shift would reduce the burden on the general population. She reiterated the government’s intention to introduce direct taxes in the upcoming budget for the fiscal year 2023-24, expressing concern over the negative impact of tax concessions on the economy.

    Meanwhile, FBR Chairman Asim Ahmed briefed the committee on the capital value tax, disclosing that the revenue generated from this tax during the current financial year amounted to Rs9 billion.

    Addressing the concerns of senators regarding the implementation of capital valuation tax on domestic and foreign assets, Ahmed clarified that this measure aimed to include the wealthier individuals in the tax net. He also noted that the revenue board was registering new individuals with foreign assets while maintaining records of those already registered.