The Federal Board of Revenue (FBR) has reported a significant 71% increase in the number of tax return filers for the fiscal year 2023 (FY23), with an additional 2.2 million people filing, bringing the total to 5.3 million. The deadline for filing income tax returns for FY24 has been set for September 30, 2024.
In FY23, the FBR collected a total of Rs9.285 trillion ($33.22 billion), slightly surpassing the revised target of Rs9.252 trillion.
Income tax collection alone reached Rs4.512 trillion, exceeding its target by 21.25%. However, the sales tax collection fell short, bringing in Rs3.096 billion, missing the target by 14.16%.
For the first two months of the current fiscal year, the FBR collected Rs1.456 trillion, falling short of its Rs1.554 trillion target by Rs98 billion.
Analysts warn that failing to meet the September tax target could lead the government to introduce additional taxes, with rumours circulating that withholding tax rates may be increased by 100 basis points across various sectors.
In July, Pakistan reached a Staff-Level Agreement (SLA) with the International Monetary Fund (IMF) for a $7 billion 37-month Extended Fund Facility (EFF), aimed at stabilising the country’s economy.
Finance Minister Muhammad Aurungzeb has repeatedly expressed his goal of increasing tax revenue to 15% of the country’s GDP by broadening the tax base to include retail, export, and agricultural sectors. The plan involves simplifying both direct and indirect taxation to create a fairer system.
Looking ahead, the government has set an ambitious revenue collection target of Rs12.97 trillion for FY25, a 40% increase over the target for FY24.
