ISLAMABAD: The Federal Board of Revenue’s revenue collection at the import stage would not have any significant impact in the remaining period of 2021-22 following the imposition of the ban on non-essential and luxury items.
Experts told Business Recorder here on Thursday that over 52 per cent of the existing tax collection comes from an import stage. At the import stage, the FBR collects customs duty, sales tax and withholding tax. The ban on 38 items at the import stage would not have a major impact on collection of taxes from imports.
Around 40 days of the current fiscal year are left. The FBR is expected to follow the current pace of revenue collection to meet the assigned revenue collection target of Rs6.1 trillion by the end of 2021-22.
The experts added that the World Trade Organization (WTO) may raise the issue with Pakistan regarding banning of items at the import stage.
Another tax expert has a different viewpoint on the revenue implications at the import stage. He was of the view that the revenue loss could be within the range of Rs 28 billion per month to Rs 35 billion due to ban on the import of items like vehicles, mobile phones and other items subjected to higher rates of duties and taxes at the import stage.
The monthly revenue impact of these items may have revenue implications of Rs 28 billion per month to Rs 35 billion per month. However, the exact impact would be clear when the exact Pakistan Customs Tariff (PCT) Heading or HS Code has been issued of the items banned by the government.
Ten major revenue spinners of sales tax at the import stage (July-December 2021-22) are: Mineral fuels, mineral oils etc; iron and steel; boilers, machinery and mechanical; plastics and articles thereof; photosensitive semiconductor devices; animal or vegetable fats and oils; vehicles other than railway or tramway; organic chemicals; oil seeds and oleaginous fruit; misc. grains, seeds and coffee, tea, mate and spices.
Major revenue spinners of customs duty at the import stage (first half of 2021-22) are: Mineral fuels, mineral oils and products of their; vehicles other than railway or tramway rolling; iron and steel; photosensitive semiconductor devices; nuclear reactor, boilers, machinery and mechanical; animal or vegetable fats and oils and their cleave; plastics and articles thereof; coffee, tea, mate and spices; paper and paperboard; articles of paper pulp; articles of iron or steel; oil seeds and oleaginous fruit; misc. grains, seeds; tanning or dyeing extracts; tannins and their deri; essential oils and resinoids; perfumery, cosmetic; ceramic products and organic chemicals.
According to the provisional information, the FBR has collected net revenue of Rs4,858 billion during July, 2021-April, 2022 of current Financial Year 2021-22, which has exceeded the target of by Rs239 billion. This represents a growth of about 28.6 per cent over the collection of Rs3,778 billion during the same period, last year. The net collection for the month of April 2022 realized Rs480 billion representing an increase of 24.9 per cent over Rs384 billion collected in April 2021.
On the other hand, the gross collections increased from Rs3,981 billion during July, 2020-April, 2021 to Rs5,122 billion in the current Financial Year July 2021- April 2022, showing an increase of 28.7 per cent.
Copyright Business Recorder, 2022