Over Rs100bn taxes withdrawn

30 Jun, 2021

ISLAMABAD: The government has withdrawn taxes of over and above Rs100 billion following withdrawal of the proposed Federal Excise Duty (FED) on mobile phone calls/SMS and internet data usage and restoration of reduced rates of sales tax on dairy, poultry, and relief to other sectors.

In budget 2021-22, the FBR has taken measures of around Rs506 billion, including taxation measures of Rs264 billion and enforcement measures of Rs242 billion. Total taxation measures were proposed at Rs383 billion for 2021-22. Total relief measures stood at Rs119 billion. The net impact of the measures stood at Rs264 billion at the time of budget.

Through amendments to the Finance Bill 2021, the FBR suffered revenue loss of around Rs100 billion following withdrawal of the proposal of imposing FED on mobile phone calls/SMS and internet data usage.

However, on mobile phone calls beyond five minutes would be charged 75 paisa tax.

This would generate around Rs20 billion in 2021-22 effective July 1, 2021.

Under the amendments made to the Finance Bill, 2021, the FBR has abolished/reduced taxes on food items and other rationalisation of taxes would result in estimated revenue loss of Rs15-20 billion in 2021-22.

Therefore, the net impact of the taxation measures now stands at nearly Rs164 billion. Sources said that the FBR's reliance on administrative/enforcement measures have been increased from Rs242 billion to Rs342 billion during 2021-22.

Copyright Business Recorder, 2021

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