- The contracts contribute Rs 496 billion to revenue collection in FY2024.
- Taxes collected on bank profits and securities up 52.8% to Rs489 billion.
- Tax revenue from telephone bills increased by 14.3% to nearly Rs 100 billion.
ISLAMABAD: The salaried segment in Pakistan has become the third largest contributor to the total tax revenue by paying a staggering Rs 368 billion in the financial year 2023-24 (FY24), up 39.3% from to Rs 103.74 billion in fiscal 2023, according to official data revealed on Tuesday.
According to data published by the Federal Board of Revenue (FBR) on its website, contracts were among the largest contributors to revenue collection during the year under review, accounting for Rs 496 billion, an increase of more than R106 billion compared to the previous year.
Additionally, taxes collected on bank profits and securities jumped 52.8% to 489 billion rupees, while taxes on dividends jumped 70% year-on-year to 145 billion rupees, which corresponds to an increase in the profitability of the business sector.
The energy sector recorded a 30% rise in tax collection from electricity bills, amounting to Rs 124 billion, while real estate transactions added Rs 104 billion collected from purchases and Rs 95 billion on sales.
Tax revenue from telephone bills increased by 14.3% to nearly Rs100 billion. On the other hand, the export sector showed an increase of 27.2%, contributing Rs94 billion.
According to the FBR document, other tax flows included technical fees, cash withdrawals, commissions and retailer contributions.
The FBR faced a large fiscal deficit of Rs 386 billion in the first half of this financial year (July-December). Revenue collection stood at Rs5.623 billion, short of the desired target of Rs6.009 billion.
Note that the IMF has given an indicative target of Rs6,009 billion until the end of December 2024, but the FBR managed a net collection of Rs 5,623 billion during the first six months of the current fiscal year (CFY) .
It remains to be seen how much the FBR collected through advance collection as it was expected to face a deficit of over Rs 400 billion in the first half of the current financial year.
A senior FBR official claimed that net revenue collection has improved till receiving the latest figures, with the collection amounting to Rs5.623 billion against the assigned target of Rs6.009 billion agreed with the IMF. It remains to be seen how the international lender will react when its assessment mission visits Pakistan, likely in the second week of February.
Pakistan and the IMF agreed that if the revenue shortfall exceeds 2% of the assigned target, emergency measures would be announced to close it. They could discuss a reduction in the tax collection target as desired by Islamabad, but the IMF could take additional fiscal measures to achieve the desired tax collection target of Rs 12.97 trillion by on June 30, 2025.
Adviser to Finance Minister Khurram Schehezad said the FBR’s tax collection for the month of December 24 stood at Rs 1,328 billion, which was 97 per cent of the monthly target. He added that the collection for December 24 is also the highest in a single month.