Tag: Revenue growth

  • IMF wants FBR to bring over 20 million Pakistanis into tax net in five years

    IMF wants FBR to bring over 20 million Pakistanis into tax net in five years

    To broaden the tax base, the Federal Board of Revenue (FBR) has outlined its five-year objectives to the International Monetary Fund (IMF), sources reveal.

    The FBR aims to include over 20 million individuals in the tax net over the next five years, as per the IMF’s requirements.

    To meet this goal, the FBR plans to register 3.72 million people and 23,500 associations of persons within the current year. Additionally, more than 9,500 companies will be incorporated into the tax system during this financial year.

    For the following fiscal year, the FBR’s target is to add 3.91 million individuals, associations, and companies to its records. By FY27, the board aims to enrol 4.1 million non-filers, with a further increase to 4.31 million individuals by FY28.

    The goal for the 2028-29 financial year is to incorporate 4.525 million people into the tax net.

    Sources indicate that the IMF has insisted on the strict implementation of this plan, starting from the current financial year.

  • Economic Survey FY24: Pakistan sees economic progress with reduced deficit, stable rupee

    Economic Survey FY24: Pakistan sees economic progress with reduced deficit, stable rupee

    Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, announced significant strides in Pakistan’s economic landscape despite numerous challenges.

    Addressing a press conference at the launch of the Economic Survey of Pakistan 2023-24, the minister highlighted a 30 per cent increase in revenue collection, a reduced current account deficit, lower inflation rates, and a stabilised currency.

    Senator Aurangzeb emphasised the remarkable economic turnaround from a previously precarious situation marked by a 0.2 per cent GDP contraction, a 29 per cent rupee depreciation, and dwindling foreign exchange reserves that had dropped to merely two weeks’ worth of import cover.

    He acknowledged the difficulties faced by the large-scale manufacturing sector, primarily due to high-interest rates and energy issues, but noted that the agriculture sector had provided a much-needed boost with bumper crops.

    “The agriculture, dairy, and livestock sectors are poised to remain key drivers of growth in the coming years,” Aurangzeb stated.

    Reflecting on the economic journey of the current fiscal year, Aurangzeb credited Prime Minister Shehbaz Sharif’s leadership and the pivotal decision to engage with the International Monetary Fund (IMF). The signing of a nine-month Standby Agreement with the IMF, he said, was crucial for the country’s progress and economic stability.

    “The decision to approach the IMF has been fruitful, restoring confidence in Pakistan’s economy,” Aurangzeb noted. He underscored the successful conclusion of the IMF’s Stand-By Arrangement (SBA) as evidence of Pakistan’s commitment to economic discipline, which had been acknowledged by the IMF.

    Looking ahead, Aurangzeb mentioned ongoing productive and constructive dialogues with the IMF, focusing on Pakistan’s reform agenda. “This is Pakistan’s program, supported and funded by the IMF,” he said, detailing areas such as tax revenue enhancement, energy sector improvements, power sector reforms, and the privatisation of state-owned enterprises.

    The minister highlighted the dramatic reduction in the Current Account Deficit (CAD) from an estimated $6 billion to just $200 million. He also noted that Pakistan had experienced a current account surplus for three consecutive months, with remittances reaching $3.2 billion in May.

    He attributed the currency’s stabilisation and the decrease in inflation to a series of administrative measures by the caretaker government, including crackdowns on illegal financial activities like Hundi-Hawala, smuggling, and regulating transit trade to Afghanistan.

    Additionally, interventions by the State Bank of Pakistan had curbed market speculation, further contributing to the currency’s stability.

    Senator Aurangzeb concluded on an optimistic note, expressing confidence in the ongoing positive dialogue with the IMF and reaffirming the government’s commitment to achieving Pakistan’s economic goals.

  • FBR surpasses May revenue target with Rs760 billion collection

    FBR surpasses May revenue target with Rs760 billion collection

    The Federal Board of Revenue (FBR) has exceeded its revenue target for May in the fiscal year 2023-24 by collecting Rs760 billion in tax revenues, surpassing the target of Rs745 billion.

    This achievement, announced in a statement by the FBR today, signifies a remarkable 33 per cent growth compared to May 2023.

    In addition to the overall revenue increase, domestic taxes also experienced a significant 33 per cent growth during May.

    “The FBR is poised to achieve the assigned target for the final month of the current financial year, June 2024,” the statement added.

    This positive trend has contributed to an overall revenue growth of 31 per cent for the first eleven months of the current fiscal year, compared to the same period last year.

  • FBR collects Rs5.15 trillion in taxes in less than eight months

    FBR collects Rs5.15 trillion in taxes in less than eight months

    The Federal Board of Revenue (FBR) has revealed that it has achieved a remarkable milestone by collecting revenue amounting to Rs5.15 trillion from July 2023 to mid-February 2024.

    This represents a substantial 30 per cent increase compared to the same period in the previous fiscal year, according to an official press release.

    The report indicates that the growth in tax revenue is attributed to a comprehensive strategy employed by the FBR, with a keen focus on both domestic and import taxes.

    Tax refunds during this period witnessed a substantial 28 per cent growth, further contributing to the positive financial trajectory.

    A breakdown of the month-wise revenue collection for the period from July 2023 to January 2024 reveals that overall growth in domestic taxes reached an impressive 40 per cent. Concurrently, import duty and related taxes experienced a significant uptick of 16 per cent.

    The surge in revenue collection aligns with the revival of the Gross Domestic Product (GDP) and increased scrutiny of FBR’s collection processes.

    However, growth in import taxes faced challenges, primarily due to downward adjustments in import tariffs over the years and recent restrictions on import licences imposed by the State Bank of Pakistan to address balance of payments concerns amid foreign exchange constraints.

    The report acknowledges that revenue collection from imports incorporates the impact of improvements in import valuations, resulting in an additional Rs151 billion in collections.

    Additionally, the anti-smuggling drive witnessed a substantial 69 per cent growth in the fiscal year compared to the previous year (FY 22–23).

    Despite these achievements, concerns were raised regarding the decline in the growth of import taxes. This decline is attributed to two main factors: the gradual reduction in import tariffs and recent restrictions on import licenses.

    The need for continued efforts in anti-smuggling activities was emphasised, particularly in Baluchistan, where the customs force currently consists of only 378 personnel.

    Strengthening the enforcement efforts by increasing personnel in this region was suggested as a potential solution.

    The report concludes on a positive note, highlighting that the revenue mobilisation from domestic taxes now accounts for over 64 per cent of the total revenues collected in the current financial year.

    Simultaneously, the share of import taxes has decreased to 36 per cent, marking a significant shift from the 50 per cent share observed just three years ago. This indicates a positive trend in the diversification of revenue sources for the FBR.

  • PTCL’s profits drop by 7.11% despite revenue increase

    PTCL’s profits drop by 7.11% despite revenue increase

    Pakistan Telecommunication Company Limited (PSX: PTC) has reported its financial performance for the first nine months of 2023.

    The company’s profit dropped by 7.11 per cent compared to the same period last year, coming in at Rs7.64 billion with earnings of Rs1.50 per share. This is less than the Rs8.23 billion profit and Rs1.61 per share in the previous year.

    On the positive side, the company’s revenue increased by 17.15 per cent compared to last year, reaching Rs71.61 billion, up from Rs61.13 billion.

    Even though the cost of sales also increased by 17.16 per cent, the increase wasn’t as much as the rise in sales, resulting in a 17.1 per cent increase in gross profit, which reached Rs15.28 billion.

    In terms of expenses, selling and marketing costs rose by 21.53 per cent year-on-year, while administrative and general expenses increased by 10.28 per cent during this period.

    Additionally, the company’s impairment loss on trade debts and contract assets went up by 6.53 per cent.

    Looking ahead, PTCL’s other income increased significantly, going up by 48.30 per cent. The company’s finance costs saw a substantial increase due to higher interest rates.

    Regarding taxes, the company paid 11.33 per cent more in taxes compared to the previous year.

  • Global 5G subscriptions set to surpass 1.5 billion by the end of 2023

    Global 5G subscriptions set to surpass 1.5 billion by the end of 2023

    The latest edition of the Ericsson Mobility Report, released in June 2023, reveals that despite challenges posed by geopolitics and macroeconomic slowdown in certain markets, communication service providers worldwide are persistently investing in 5G technology. The report demonstrates that the adoption of 5G subscriptions in North America has surpassed previous expectations, with the region leading in global 5G subscription penetration at 41 per cent by the end of 2022.

    The study further indicates a consistent rise in 5G subscriptions across all regions, projected to reach over 1.5 billion by the end of 2023. Concurrently, global mobile network data traffic continues to escalate, with an anticipated monthly average usage per smartphone exceeding 20 GB by the end of 2023.

    Additionally, the report highlights sustained revenue growth in prominent 5G markets. Fredrik Jejdling, the Executive Vice President and Head of Networks at Ericsson, emphasises the positive impact of 5G technology on communication service providers, stating, “The global adoption of 5G technology has exceeded one billion subscriptions, resulting in favorable revenue growth for leading 5G markets. The increase in 5G subscriptions correlates directly with enhanced service revenue. Over the past two years, the introduction of 5G services in the top twenty markets has generated a seven percent revenue boost. This trend underscores the increasing value of 5G, benefiting both users and service providers.”

    Globally, approximately 240 communication service providers (CSPs) have introduced commercial 5G services, with around 35 deploying or launching 5G standalone (SA) networks. Notably, CSPs commonly offer various bundled packages that include popular entertainment services, such as television, music streaming, or cloud gaming platforms. Presently, about 58 per cent of 5G service providers offer such bundled packages in diverse formats.

    Moreover, the report identifies 5G as a catalyst for innovation in mobile service packaging. This is exemplified by the increasing number of CSPs offering Fixed Wireless Access (FWA) services over 5G, with more than 100 providers, accounting for approximately 40 per cent of FWA service providers, currently delivering FWA over 5G. FWA is experiencing solid growth in terms of the number of mobile service providers offering it, the proportion of providers offering FWA over 5G, the proportion of CSPs implementing speed-based tariff structures, and the volume of traffic served, as both the number of connections and traffic per connection continue to increase. By 2028, it is projected that 5G will account for nearly 80 per cent of all FWA connections.

    The June 2023 Ericsson Mobility Report also includes four comprehensive articles exploring various topics, including the influence of traffic patterns on network evolution, the potential for differentiated services in 5G networks, the advancements facilitated by mobile networks in augmented reality (AR) adoption, and the readiness of mobile networks to deliver a superior quality of experience for new services.