ISLAMABAD: The major contributors to income tax collection during July-January (2023-24) were banks, petroleum products, textile sector, power sector and food and services sectors, whereas, sales tax top revenue spinners remained POL, power, food, auto sector, iron and steel, and chemicals during this period.
According to the data issued by the Ministry of Finance on Tuesday, the Federal Board of Revenue (FBR) collected revenue of Rs5,150 billion from July 2023 to mid of February 2024 against Rs3,973 billion over the same period last fiscal year, almost 30 per cent of tax revenue growth.
During this period, tax refunds grew by more than 28 percent.
Jul-Dec tax collection: FBR surpasses target
The breakup of tax collection revealed that the FBR has collected income tax of Rs2,447 billion during July-January (2023-24) as compared to Rs1,751 billion during July-January (2022-23), reflecting an increase of 40 percent.
The FBR has collected Rs1,766 billion under the head of sales tax during July-January (2023-24) as compared to Rs1,480 billion during July-January (2022-23), reflecting an increase of 19 percent.
The collection of the FED was Rs307 billion during July-January (2023-24) as compared to Rs190 billion during July-January (2022-23), reflecting an increase of 61 percent.
The FBR has collected customs duty of Rs629 billion during July-January (2023-24) as compared to Rs552 billion during July-January (2022-23), reflecting an increase of 14 percent.
During this period, tax refunds grew by more than 28 per cent.
Overall growth in the domestic taxes has been around 40 per cent, while import duty and related taxes grew by 16 per cent over the July 2023 to January 2024 period. Growth in revenues gained momentum as GDP has revived and FBR collection has come under tighter scrutiny.
Notwithstanding, growth in import taxes fell largely because of (i) downward adjustments in import tariffs over the years, and (ii) more recently restrictions on import licenses imposed by the State Bank of Pakistan (SBP) to contain a balance of payments position in the wake of foreign exchange constraints.
The revenue collection from imports does however incorporate the impact of the improvements in the valuation of imports that yielded Rs151 billion collections as well as anti-smuggling drive (that witnessed almost 69 per cent growth in FY vis-à-vis FY 22-23). There is scope to enhance anti-smuggling efforts by looking into increasing the customs force in Balochistan which is currently only 378 anti-smuggling staff (compared to 20,000 personnel in the province undermining the enforcement efforts).
The revenue mobilisation from domestic taxes is a welcome shift. The domestic tax collection is now over 64 per cent of the total revenues collected during the current financial year. Concurrently, the import taxes shared has declined to 36 per cent from more than 50 per cent just three years ago.
The tax-wise collection revealed that the major contributor of income tax remained banks, POL, textile, power, food and services sectors during July-Jan 2023-24 as compared to the same period of last fiscal year.
Major contributors to sales tax were POL, power, food, autos, iron and steel, and chemicals during this period.
Major contributors to federal excise duty were tobacco, cement, beverages, airlines, fertilisers, and autos during July-Jan 2023-24.
Major contributors to customs duty were POL, autos, iron and steel, electronics, and food during the period under review, it added.
Copyright Business Recorder, 2024
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