FBR Implements Strategic Measures to Address Projected Tax Revenue Shortfall
The Federal Board of Revenue (FBR) has introduced a range of short- and long-term strategies to address a projected tax revenue shortfall exceeding Rs 230 billion for the second quarter of the fiscal year 2024-25, spanning October to December.
In October, the FBR collected Rs 877 billion, falling short of its target of Rs 980 billion by Rs 103 billion. Cumulatively, the FBR has amassed Rs 3,440 billion in the first four months of the fiscal year, trailing its target of Rs 3,636 billion and resulting in a Rs 196 billion shortfall.
To counter this gap, the FBR has adjusted its initial economic projections, including GDP growth, imports, inflation, and large-scale manufacturing, which form the basis for setting tax targets. The revised approach involves more rigorous enforcement measures and adjustments to tax rates.
Among the key steps, the FBR plans to increase revenue through a new tax law pending review by the Law Division and intensify efforts to combat tax fraud by targeting individuals and companies engaged in fraudulent practices.
Over 190,000 high-net-worth individuals identified through third-party data will receive new tax notices, with a recovery potential estimated at Rs 7 billion.
Additionally, the government has approved increases in federal excise duties on sugary beverages and raised withholding tax rates on various imports and services, which are expected to contribute an additional Rs 10.8 billion monthly.
The FBR is also working closely with the International Monetary Fund (IMF) on potential backup measures in case revenue collection continues to lag. These measures may include further hikes in advance income and withholding taxes to strengthen revenue inflows.
In tandem with these initiatives, the FBR remains focused on expediting pending sales tax refunds, with Rs 32 billion in refunds already processed for exporters as part of efforts to stabilize tax revenue collection.
Follow us on our social media platforms here: Twitter WHATSAPP CHANNEL FACEBOOK PAGE
Comments are closed, but trackbacks and pingbacks are open.