How did FBR achieve tax target of RS.9.285 Trillion in 2023

How did FBR achieve a tax target of RS.9.285 Trillion in 2023-

2024 tax target.

In recent years, FBR has failed to meet its official tax target due to a lack of reforms and failure
to implement decisions to tax the wealthy and untaxed sectors. At the beginning of 2023, the
FBR's official tax target of RS.9.415 Trillion was revised to a lower amount due to the projected
shortfall and a reluctance to implement reforms and tax undocumented sectors.

The FBR implemented an additional 10% super tax on large industries and manufacturers,
leading to backlash from businessmen and the media who were reluctant to comply. The courts
granted a stay on the super tax and requested FBR to provide proper justification and conduct a
thorough audit to validate the tax. Despite this, FBR successfully reached the target of RS.9285
trillion, exceeding the RS.9.252 trillion annual forecasts for the fiscal year 2023-2024.

FBR implemented measures against non-filers with an income of 2 million or more, initiating the
blocking of their SIM cards and sharing their information with telecom companies like Jazz,
Ufone, and Zong. Initially, the telecom companies rejected the proposition, but eventually agreed
to block the non-filers' SIM cards in batches of 5000, causing concern and inconvenience for the
affected individuals. FBR also issued a warning that non-filers who did not cooperate would face
disconnection of their electricity and gas services. As a result, the majority of non-filers on the
list felt compelled to submit their returns.

The taxes on salary incomes were generated by the FBR, with a range of 0% to 35% as the
maximum threshold. The income tax collection for the fiscal year 2023-2024 amounted to
RS.4.152 trillion, surpassing the revised target by 21.25%. This demonstrates an impressive
performance by the FBR, outperforming the revised target of RS.3.721 trillion. However, there
was a shortfall in sales tax collection as the FBR's target of RS.3.607 trillion was not met, with
only RS.3.096 trillion being collected, resulting in a shortfall of over 14%, even after the FBR's
target was revised. The Federal exercise duty (FED) contributed approximately RS.576 billion,
falling short by 4% compared to the revised target of 600 billion due to the government's import
compression. Additionally, the FBR gathered 1.101 trillion RS, falling short of the 1.324 trillion
RS target by more than 16% due to government initiatives to safeguard foreign reserve outflows.

The lack of trust and fear of harassment have led to several flaws in FBR, resulting in people's
reluctance to file their returns and their willingness to pay higher withholding tax and FED rather
than deal with FBR's complexities. Therefore, FBR's organizational reform and digitalization are
crucial. Despite numerous obstacles and leaks, FBR's tax collection for the fiscal year 2023-2024
has been impressive, as it still managed to meet the revised target.