ISLAMABAD: The revenue collection saw a paltry growth of 3.9 per cent year-on-year in 2019-20 mainly due to the lockdown and a sharp deceleration in economic activity since the coronavirus outbreak.
From March 18, the government imposed lockdown across the country which was relaxed in the second half of May. The steepest fall in collection was seen in the months of April, dipping by 16pc and May 30.8pc from last year.
However in June, the quantum of decline eased to 12pc as the government further relaxed the lockdown and revenue collection reached Rs415bn during the month, compared to Rs472bn in the same period last year.
Last year’s collection in June also includes the one-time receipt of Rs50bn from the tax amnesty scheme. The revised revenue target for outgoing June was Rs398bn.
Provisional data show that the Federal Board of Revenue has collected Rs3.967 trillion between June and July, as against Rs3.826tr received in FY19, showing an increase of 3.9pc.
The revised annual revenue collection target for the FBR was Rs3.908 trillion.
The FBR expects to receive a few more billion rupees when the revenue collection figures are finalised in the next few weeks owing to book adjustments.
The International Monetary Fund (IMF) had revised the revenue collection target for the third time to Rs3.908tr from Rs4.8tr – a reduction of Rs892 billion – owing to the sharp economic slowdown after Covid-19.
On average, the FBR estimates that revenue collection fell by Rs223bn per month after the outbreak of coronavirus.
Contrary to this, in the pre Covid-19 period, the FBR missed tax collection target for July-February FY20 by a whopping Rs484bn and received Rs2.725tr during this period, as against the benchmark of Rs3.209tr.
However, revenue in 8MFY20 increased 16.35pc compared to Rs2.342tr collected during the same period of the last fiscal year.
To adjust the shortfalls accrued in the pre Covid-19 period, earlier the IMF had reduced revenue target to Rs4.8tr, from Rs5.270tr.
Tax-wise breakdown for FY20 showed that customs collections fell by 9pc or Rs60.860bn to reach Rs618.780bn, as against Rs679.640bn in 2018-19. The decline was mainly attributable to falling imports.
Meanwhile, income tax collection clocked in at Rs1.484tr in 2019-20 versus Rs1.424tr over the last year, showing an increase of 4.2pc or Rs60.058bn.
Sales tax on goods rose by 9.3pc (or Rs135.738bn) to Rs1.597tr in FY20, as compared to Rs1.461trn last year while federal excise duty collection grew by 6.1pc – Rs14.759bn – to Rs255.687bn, as against Rs240.927bn.
The payment of refunds/rebates stood at Rs127.849bn during 2019-20, surging by 85.28pc over Rs69.003bn in the preceding year.
The highest refunds were given in sales tax, which came in at Rs88.164bn this year, as against Rs21.083bn in FY19, soaring by 318pc. On the other hand, income tax refunds fell by 14.4pc to Rs27.635bn, from Rs32.290bn.
A similar decline of 22.8pc was seen in the payment of customs rebate which amounted to Rs12.026bn in 2019-20, as against Rs15.585bn in FY19.