ISLAMABAD: The share of domestic taxes in overall tax collection of the Federal Board of Revenue (FBR) has declined to 47.9 percent during July-December (2021-22) as compared to 55.7 percent during the same period of 2020-21.
The FBR’s data revealed that during the current fiscal year (July-December) period, the share of domestic taxes has declined to 47.9 percent as compared to 55.7 percent during the previous fiscal year. There are a number of reasons for this decrease during the said period.
In case of crude oil, the incidence of taxation has shifted from domestic (ex-refinery) to import stage. This has contributed heavily in reducing the share of domestic sales tax. Second, the increase in international price of such essential items as edible has increased their overall import value, which has also resulted in higher sales tax at import stage.
The import of edible oil in value terms increased from Rs.196.2 billion to Rs.329.1 billion or 67.8 percent, in the first half (July-December) of the current fiscal year as compared to first half of previous fiscal year. Third, due to increased economic activity in sectors like textile and agriculture, import of cotton and fertilizers has recorded a significant increase. For instance, import of cotton has jumped in terms of quantity and value by 19.2% and 64.2%, respectively.
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During first half (July-December) 2021-22, sales tax remained top revenue generating sources of federal taxes receipts. It constitutes around 43.7 percent of the total net revenue collection. The collection during first half (July-December) 2021-22 has been around Rs. 1,275 billion against Rs. 916.8 billion in the first half (July-December) 2020-21. Overall sales tax collection grew by 39.1% and in absolute terms around Rs. 358.2 billion of higher amount has been collected during first half (July-December) 2021-22 as compared to the collection of corresponding period previous year.
Copyright Business Recorder, 2022
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