The Federal Board of Revenue (FBR) is grappling with a significant shortfall in tax collection for the month of August, falling Rs113 billion short of its monthly target. According to sources within the FBR, the tax authority managed to collect Rs785 billion in the 30 days of August, against a set target of Rs898 billion.
However, the FBR remains hopeful that revenue collection will increase on the final day of August, which could help reduce the overall shortfall for the month. The final data for August’s revenue collection will not be available until Monday.
In contrast, the FBR exceeded its revenue target for the first month of the current financial year in July, collecting Rs659.2 billion against a target of Rs656 billion. Combined, the total tax collection for July and August stands at Rs1,445 billion.
The government’s overall tax collection target for the current financial year is a record Rs12,970 billion. However, the government has reportedly assured the International Monetary Fund (IMF) that it will introduce a mini-budget if there is a significant shortfall in revenue collection during the first quarter.
Despite the shortfall, Pakistan’s economic landscape is showing signs of improvement. The Ministry of Finance released its latest monthly economic update, revealing a gradual decrease in the country’s inflation rate, which reached its lowest level in 32 months in July 2024.
In July 2024, the inflation rate dropped to 11.1%, a sharp decline from the 28.3% recorded in the same month of the previous fiscal year. This drop in inflation is seen as a significant achievement for the government’s economic policies, aimed at stabilizing the economy and easing the burden on consumers.
Additionally, remittances saw a remarkable increase of 47% in July, reaching a volume of $3 billion. Exports also showed a healthy growth of 12.9%, recording $2.4 billion in July, while foreign imports rose by 16.3% to $4.8 billion.
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