Islamabad: The Federal Board of Revenue (FBR) has reported a successful start to the fiscal year 2024-25, collecting a gross revenue of Rs. 1,588 billion in July and August, surpassing its target of Rs. 1,554 billion. The net revenue collected during these months was Rs. 1,456 billion, with refunds totaling Rs. 132 billion issued primarily to exporters to aid their cash flow. This marks a 44% increase in refunds compared to the same period last year.

According to Press Information Department, the FBR’s collection under the head of domestic income tax stood at Rs. 593 billion for the initial two months, a 36% increase from Rs. 437 billion collected in the corresponding months of 2023. The domestic sales tax witnessed an impressive 40% growth, totaling nearly Rs. 314 billion. Federal Excise Duty (FED) collections also rose by 13%, reaching about Rs. 86 billion. Overall, there was a near 35% increase in the collection of domestic taxes.

However, the performance on the import side did not mirror this positive trend, primarily due to a continued compression in imports. In US dollar terms, imports declined by 2.2% in August 2024 compared to August 2023, with a 7% decrease in PKR value over the same period. The reduction in imports of high-duty items such as vehicles, home appliances, and various consumer goods like garments and footwear significantly altered the import mix, affecting the collection of customs duties and other import-stage taxes. Despite these challenges, customs duties saw a modest 4% increase.

The cumulative net collection growth by FBR marked a 21% increase compared to the previous year. FBR is optimistic about meeting its revenue targets for the first quarter, anticipating a resurgence in economic activity and imports in September, supported by recent government interventions including a lower policy rate. Additionally, significant growth is expected due to ongoing digitization efforts and other reforms initiated by FBR, such as end-to-end monitoring of supply chains, automated production monitoring, point-of-sale integrations, AI-based data integration, import scanning, and strict integrity management of the FBR workforce. These reforms are being closely supervised by the Prime Minister and the Finance Minister to ensure enhanced compliance and facilitation of business growth and ease.