ISLAMABAD: Revenue collection plunged steeply in the month of May, falling by 30.8 per cent to Rs227 billion, with all four major heads showing declines.

May was the second full month of lockdown and the data reflects a sharp deceleration in economic activity. In the month of April, the decline in revenue collection from last year collection was over 16pc.

The FBR estimates the annual revenues will take a hit of Rs850bn.

Provisional data released here late night by FBR show that the revenue collection remains short of the revised target by almost Rs18bn or 7.34pc.

The International Monetary Fund (IMF) had recently revised the revenue collection target for the third time to Rs3.908trillion from Rs4.8tr, a reduction of Rs892bn owing to the sharp economic slowdown due to the lockdowns, revised downward twice from the budgetary projection of Rs5.503tr.

To achieve the revised target, FBR will now have to collect Rs391bn in the month of June to reach the revised target of Rs3.908tr.A fall in revenue collection is rare.

Even in the worst of times, revenue collection usually rises by at least as much as the inflation rate. Up to March revenues were showing an increase of around 16pc every month. A decline of 30.8pc in May shows a sharp contraction underway in the economy.

Between July-May, the total revenue collection reached to Rs3.518tr compared to Rs3.266tr of last year, showing a growth of 7.7pc.

Tax-wise breaks up for the 11 months showed that customs collections fell by 9.6pc to Rs550.268bn compared to Rs608.847bninthelastyear.The decline was mainly attributable to falling imports.

The income tax collection clocked in at Rs1.302tr versus Rs1.164tr over the same period last year, showing an increase of 11.9pc. The withholding tax collection at the import stage fell by 8.3pc during the period under review.

In addition, during the months under review, sales tax collection on goods posted a growth to Rs1.439trn as compared to Rs1.288trn last year, showing a growth of 11.7pc. The federal excise duty collection reached Rs225.545bn against Rs204.426bn over the last year, showing an increase of 10.3pc.