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Dar directs FBR to boost efforts for achieving ‘true tax potential’

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Finance Minister Ishaq Dar on Tuesday directed the Federal Board of Revenue (FBR) to accelerate its efforts to achieve the true tax potential of the country.

The financial czar made the remarks while presiding over a meeting in Islamabad to review the performance of the FBR.

Dar extended his full support to the FBR in the performance of its duties for revenue collection.

During the meeting, FBR Chairman Asim Ahmad gave a detailed presentation on revenue targets and the performance of the FBR during the first nine months of the current fiscal year. It was stated that the FBR would make all-out efforts to meet its revenue target in the remaining months of the current financial year.

On February 1, the FBR claimed that it had collected Rs3,965 billion in tax collection in seven months (July-Jan) period and will have to collect Rs3,505 billion more in the remaining five months (Feb-June) of the current fiscal to meet the Rs7,470 billion target.

According to an FBR announcement, the tax machinery had surpassed the tax collection target envisaged for January 2023 with a margin of just Rs4 billion; its collection stood at Rs537 billion against the fixed target of Rs533 billion. However, FBR faced a revenue shortfall of Rs225 billion in December 2022 target.

It is argued by the FBR authorities that December 2022 was wrongly fixed on the higher side and they would be able to collect the fixed target for Income Tax, Sales Tax and Federal Excise Duty (FED). However, it might face a shortfall of Rs170 billion on account of Customs Duty collection.

The latest estimates suggest that the devaluation of the exchange rate will help the FBR overcome its expected shortfall in the current fiscal year.

According to the official statement issued by the FBR, the revenue collector had demonstrated performance during January 2023 and had not only achieved the monthly budgetary target of Rs533 billion but also surpassed it by Rs4 billion.

According to provisional figures, the FBR collected Rs537 billion in the month of January, showing a growth of 23% compared to the same month last year.

Cumulatively, the FBR had collected Rs3,965 billion in the first seven months of the current financial year against Rs3,367 billion collected in the corresponding period of the last year, depicting a growth of 18%.

The third quarter of the current fiscal year started with an impressive performance and the FBR was committed to meet the annual budgetary target of Rs7,470 billion for the current financial year despite economic challenges, said the statement.

According to the tax regulator, direct taxes collection had shown growth of 48% during the first seven months of the current financial year.

The growth in domestic taxes was 40% during the same period. The contribution of domestic taxes has also increased from 50% last year to 59% during the current year.

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In a first for history, PSX crosses the 77,000 milestone.

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At 77,213.31, the benchmark KSE-100 hit an all-time high, up 1,005.15, or 1.32%, from the previous close of 76,208.16.

The government’s readiness to seal an agreement with the International Monetary Fund (IMF) following the budget was cited by analysts as the reason for the upward trend.

Experts anticipate that in an attempt to bolster its position for a fresh bailout agreement with the International Monetary Fund (IMF), the budget for the fiscal year ending in June 2025 would set aggressive fiscal goals.

Budget for Pakistan, 2024–2025
Pakistan’s budget for the fiscal year 2024–25, with a total expenditure of Rs18.877 trillion, was presented on Wednesday by Minister of Finance and Revenue Muhammad Aurangzeb.

The Finance Minister, Muhammad Aurangzeb, outlined the budget highlights. He stated that the GDP growth target for the fiscal year 2024–25 is set at 3.6 percent, while the inflation rate is anticipated to stay at 12 percent.

He stated that while the primary surplus is anticipated to be 1.0 percent of GDP during the review period, the budget deficit to GDP is forecast to be 6.9 percent over the period under review.

According to the minister, tax income collection increased by 38% in the current fiscal year, and the province will receive Rs7,438 billion. The Federal Board of income expects to earn Rs12,970 billion in revenue for the upcoming fiscal year.

In contrast to the federal government’s projected net income of Rs9,119 billion, he stated that the federation’s non-tax revenue projections are set at Rs3,587 billion.

The federal government’s total outlays are projected to be Rs18,877 billion, with interest payments accounting for the remaining Rs9,775 billion.

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Pakistan currently has $14.38 billion in foreign exchange reserves.

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Pakistan’s commercial banks’ reserves, which stood at $5.28 billion at the conclusion of the week ending on June 7, rose by US$174 million, according to a central bank statement.

Reserving US$6.2 million less, the SBP now has US$9.10 billion in reserves. The causes for the decline in the reserves it had were not disclosed by the central bank.

The SBP released a statement that stated, “SBP reserves decreased by US$ 6 million to US$ 9,103.3 million during the week ended on 07-June-2024.”

The State Bank of Pakistan’s (SBP) foreign exchange reserves were reduced by US$ 63 million as a result of repaying external debt, with the reserves standing at US$ 9.093 billion as of earlier on June 6.

The central bank spokesperson said in a statement that as of the week that concluded on May 31, the nation’s total liquid foreign reserves were $14.31 billion.

In terms of net foreign reserves, commercial banks have US$ 5.22 billion of the overall foreign reserves, according to the SBP.

SBP reserves dropped by US$ 63 million to US$ 9,093.7 million during the week that ended on May 24, 2024, according to the announcement.

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In the local market, the price of gold plummets to Rs240,700/tola.

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Gold with a 24-karat purity level has dropped by Rs1200/tola on the local market.

Each tola of 24-karat gold is now selling for Rs240,700, with a further drop of Rs1029 bringing the price of 10 kilos of gold to Rs206,361. These figures are courtesy of the All Sarafa and Jewelers Association.

Meanwhile, after a $2 decline on the global market, one ounce of gold will be valued $2315.

A tola of gold was worth Rs 600 more on Wednesday.

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