ISLAMABAD: The Federal Board of Revenue (FBR) will resume virtual talks with the International Monetary Fund (IMF) on Monday to review revenue collection performance in the first two months of the current fiscal year, as well as projections for the coming months, a senior government official told Dawn on Saturday.

The IMF team will discuss the performance of the FBR and revenue measures taken in March, followed by further tax measures in the last budget. “We will brief the IMF team on the revenue performance of first two months — July and August,” the official said.

In July 2023, the lender’s Executive Board had approved a nine-month Stand-By Arrangement (SBA) for Pakistan for an amount of $3 billion to support the country’s economic stabilisation programme.

This meeting on revenue performance, according to the official, is part of the SBA.

Official claims board exceeded revenue expectations for July, on track to meet August targets as well

The FBR has exceeded its revenue target for the month of July 2023 by Rs4 billion, according to official. The projected target for the month was Rs434 billion.

The official further claimed that the FBR is on track to meet its target for the month of August as well, and revenue collection figures for this month are expected to be made public in the coming days.

The primary contributor to the increase in revenue collection has been the unprecedented rise in petroleum product prices. This has led to an increase in retail prices, resulting in higher revenue collection.

“We are receiving maximum revenue due to highest-ever inflation,” the official stated.

Revenue collection in July showed a 16.6pc growth as compared to the corresponding month last year. FBR paid Rs49bn in refunds during the month under review. Similarly, direct taxes continue to show remarkable growth of 30pc during the current month.

The government has projected a revenue collection target of Rs9.415tr for FY24, as against the revised collection of Rs7.2tr in FY23, showing an increase of Rs2.219tr or 30pc.

It hopes to achieve a 30pc higher revenue target for the current fiscal year, based on the projected economic growth of 3.5pc, average inflation of 21pc and some revenue measures. The autonomous growth in revenue — to come from GDP growth and inflation — is projected at Rs1.76tr in 2023-24.

The sum of new tax measures for the fiscal year (FY24) now stands at Rs948bn. The revenue measures announced in the budget speech stood at Rs223bn, in addition to all taxes worth Rs500bn introduced in a mini-budget in mid-February. At the winding of the budget speech on June 24, another Rs215bn worth of new taxes were imposed.

In FY23, FBR missed its annual budgetary collection target by almost Rs522bn, or 8.83pc, as against Rs7.64tr projected target for FY23.

Published in Dawn, August 27th, 2023