Pakistan's tax collecting authority adds 2.2 million new filers in FY23

The number of tax return filers increased by 71% or 2.2 million in FY23 to 5.3 million, according to Federal Board of Revenue (FBR), Pakistan's tax collecting authority.

The last date for filing income tax returns for FY24 is September 30, 2024.

The FBR collected PKR 9.285 trillion ($33.22 billion) in 2023-24, slightly exceeding the downward revised target of PKR 9.252 trillion.

The income tax collection reached PKR 4.512 trillion surpassing the target by 21.25%. However, the sales tax collection reached PKR 3.096 billion missing the target by 14.16%.

In the first two months of current fiscal year, FBR collected PKR 1.456 trillion missing the target of PKR 1.554 trillion by PKR 98 billion.

Analysts fear that if the September tax target is not achieved, government might impose more taxes. Market is already abuzz with rumors that government may increase the rate of withholding tax rate by 100 basis points across the board.

In July this year, the International Monetary Fund (IMF) reached a Staff-Level Agreement (SLA) with Pakistan for a $7-billion 37-month Extended Fund Facility (EFF).

Finance Minister Muhammad Aurungzeb has time and again expressed his vision to increase tax revenues to 15% of GDP. This would be achieved through bringing retail, export and agriculture sectors properly into taxation system. Moreover, revenue collections will be supported by simpler and fairer direct and indirect taxation.

In the budget for FY25, the government projected a collection target of PKR 12.97 trillion, more than 40% higher than the collection set for FY24.