ISLAMABAD: The Federal Board of Revenue (FBR) has witnessed 10 percent growth in revenue collection during July-March (2020-21) against the same period of last fiscal year as a result of revenue generated from imports, withholding taxes, enforcement measures, raising tax demand of Rs1.6 trillion, increased sales tax collection from five export
sectors, and improvement in domestic sales tax collection.
Official sources told Business Recorder here on Friday that the import related taxes including customs duty contributed nearly 65 percent of the total tax collection during March 2021 whereas domestic taxes contributed over 35 percent in total collection during March 2021. The withholding taxes have a significant contribution of 64-65 percent in overall direct taxes collection during March 2021. The FBR has met targets of sales tax and customs duty, but the targets of income tax and Federal Excise Duty (FED) were missed during this period.
The FBR has met targets of sales tax and customs duty, but the targets of income tax and the Federal Excise Duty (FED) were missed during this period.
Officials said that the FBR has created a current tax demand of Rs1.6 trillion during July-March (2020-21), which is more than the total tax demand raised during the last five years.
The sales tax and income tax demands raised in Sept, Oct, and Nov 2020 have now started showing results in the form of recovery in the field formations.
Out of 90 percent tax demand of Rs1.6 trillion, 90 percent has been raised by four Large Taxpayer Offices (LTOs) against the big corporate entities and multinational companies.
Officials said that the operational autonomy has now been available to the FBR, which allowed the Board to conduct enforcement activities at full scale on the national level.
The domestic sales tax collection has shown improvement in auto and retail sectors.
The composite audits of sugar, cement, fertiliser, and tobacco sectors are being done and tax demand of Rs404 billion was raised from 50 sugar mills.
Officials stated that another major factor is the increased sales tax collection from five leading export sectors i.e. textile, leather, surgical, carpets and sports goods during July-March 2020-21.
The 17 percent sales tax was imposed on erstwhile five zero-rated sectors in 2019-20, but the payable tax was diverted to other areas to avoid actual payment of sales tax. Now due to strict enforcement, the actual amount of sales tax has now started coming into the national kitty in 2020-21. This has also resulted in improved revenue collection from the retail stage of leading sectors and industries.
In the last budget, there were zero revenue measures and tax relief of Rs25-30 billion was provided to the taxpayers including industry/trade. During the current fiscal year, senior tax officials claimed that the FBR has not taken any advances from the companies. The FBR has also cleared all current refunds of exporters. The income tax returns for tax year 2020 have reached 2.8 million compared to 2.6 million last year, showing an increase of eight percent.
The tax deposited with returns stood at Rs51 billion as compared to Rs33.0 billion, showing an increase of 54 percent.
Sales tax returns for the period from July 2020 to February 2021 have reached 179,584, whereas, they were 167,769 in the corresponding months last year, showing an increase of 7.04 percent.
The sales tax paid with returns was Rs624 billion during this year which was Rs536 billion last year, showing an increase of 16.41 percent.
Copyright Business Recorder, 2021
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