ANL 33.30 Decreased By ▼ -0.50 (-1.48%)
ASC 14.65 Decreased By ▼ -0.48 (-3.17%)
ASL 24.50 Decreased By ▼ -1.00 (-3.92%)
AVN 92.02 Decreased By ▼ -3.48 (-3.64%)
BOP 9.05 Decreased By ▼ -0.12 (-1.31%)
BYCO 9.82 Decreased By ▼ -0.41 (-4.01%)
DGKC 132.70 Decreased By ▼ -4.80 (-3.49%)
EPCL 50.11 Decreased By ▼ -1.51 (-2.93%)
FCCL 24.40 Decreased By ▼ -0.60 (-2.4%)
FFBL 24.51 Decreased By ▼ -0.94 (-3.69%)
FFL 15.15 Decreased By ▼ -0.55 (-3.5%)
HASCOL 10.55 Decreased By ▼ -0.35 (-3.21%)
HUBC 85.20 Decreased By ▼ -1.55 (-1.79%)
HUMNL 6.75 Decreased By ▼ -0.35 (-4.93%)
JSCL 25.80 Decreased By ▼ -1.24 (-4.59%)
KAPCO 39.30 Decreased By ▼ -0.70 (-1.75%)
KEL 3.98 Decreased By ▼ -0.17 (-4.1%)
LOTCHEM 14.60 Decreased By ▼ -0.20 (-1.35%)
MLCF 46.11 Decreased By ▼ -1.48 (-3.11%)
PAEL 37.10 Decreased By ▼ -1.20 (-3.13%)
PIBTL 11.62 Decreased By ▼ -0.29 (-2.43%)
POWER 10.24 Decreased By ▼ -0.46 (-4.3%)
PPL 89.90 Decreased By ▼ -1.07 (-1.18%)
PRL 26.70 Decreased By ▼ -0.75 (-2.73%)
PTC 8.62 Decreased By ▼ -0.19 (-2.16%)
SILK 1.35 Decreased By ▼ -0.05 (-3.57%)
SNGP 41.80 Decreased By ▼ -1.95 (-4.46%)
TRG 144.30 Decreased By ▼ -3.40 (-2.3%)
UNITY 30.17 Decreased By ▼ -1.03 (-3.3%)
WTL 1.44 Decreased By ▼ -0.08 (-5.26%)
BR100 4,913 Decreased By ▼ -103.11 (-2.06%)
BR30 25,437 Decreased By ▼ -693.23 (-2.65%)
KSE100 45,498 Decreased By ▼ -659.8 (-1.43%)
KSE30 18,987 Decreased By ▼ -320.32 (-1.66%)

The Federal Board of Revenue (FBR) has described slowdown in the construction-allied sectors including cement and steel, and import compression as major factors behind revenue shortfall during 2018-19. According to the FBR's biannual review (July-December 2018-19) issued on Tuesday, the main reasons for revenue shortfall during 2018-19 included a sharp reduction in the general sales tax (GST) rate on petroleum products. The impact of income tax incentives announced by the past government in the Budget 2018-19, reduced income tax rates on salary, suspension of withholding tax on telecom by the Supreme Court, lower collection of withholding tax against PSDP-related contracts, and slowdown in the construction-allied sectors led to lower collections from cement and steel sales, besides import compression.

During 2018-19, the income tax rates on salary (section 149) were substantially reduced, which resulted in massive negative growth in revenue collection from this head. Due to lower profitability declared by companies this year, tax on dividend income (section 150) had also recorded massive drop in withholding collection under this head.

Furthermore, the suspension of withholding tax under Section 236 from Telcos (prepaid cards/top ups of mobile phone companies) has continued to-date which has had a major adverse impact on receipts.

Due to compression of imports, growth in collection under Section 148 was meager. Moreover, restriction imposed on purchase of assets (as per specified categories under section 227C) on non-filers also adversely affected withholding revenue receipts under Section(s) 236K/231B during the period.

In addition, the massive scaling down of PSDP and its slow utilization has adversely affected revenue collection under Section 153 (Supplies & Contracts). It is further observed that almost all the major contributing withholding sections - 148, 149, 150, 153 & 236 - have been adversely affected, the FBR's biannual review added.

Copyright Business Recorder, 2019