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Wednesday, August 17, 2022
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EditorialRecord tax collections

Record tax collections

The Federal Board of Revenue (FBR) has announced that this year tax collections exceeded the set targets in the first quarter of the ongoing financial year. This is great news and for this reason, the ecstatic prime minister, Imran Khan, congratulated the FBR on a 37% increase in tax collections in comparison to the previous year. According to him, a significant portion came from income tax and not imports. He was referring to the undue criticism heaped on the board from certain quarters that a large chunk of the collections came from the duties as imports have increased 103 percent. The fact, however, is that sales tax, buoyed by the domestic growth has contributed a lot to the collection figures. Overall, the performance looks good.

The finance minister was also happy with the tax collections. He was quick to make a connection between the increase in tax collection and economic growth. It seems like the International Monetary Figure’s (IMF’s) provision of collecting a certain amount of revenue has also been fulfilled. This is likely to produce a suitable outcome in the IMF report that is due in the following week. By looking at the amount collected by the FBR, the IMF is likely to provide the sixth tranche out of the $6bn extended fund facility.

A major part of this total also came from customs. Although there has been an increase in the black market due to the Afghan refugee crisis, much of the portion was collected by taxing imports. Other than that, there has been an increase in both sales and income tax collections since the previous year.

Give credit where credit’s due and one must acknowledge that there has been a significant increase in tax collection over the past few years as the government has introduced policies which make it extremely difficult for people to evade taxation. However, there are many who still manage to do so. The PTI government’s manifesto included the increase in tax base and collection and it seems like the government is doing at least one thing right. This is the time the government strengthens the institutions and instead of changing the FBR chairpersons every other day, it should show support to the officials, instead of succumbing to lobbyists and protesting traders.

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