RECORDER REPORT

ISLAMABAD: The Federal Board of Revenue has admitted that the overall collection of sales tax (domestic) depends on the collection of petroleum products as it contributes around 43% of the sales tax collection at local stage during 2011-12.

The FBR quarterly report released here on Friday said petroleum is the leading contributor of sales tax domestic collection. The overall collection of sales tax domestic depends on the collection of petroleum products as it contributes around 43% of the sales tax domestic. The growth is mainly attributable to increased taxable sales of petroleum products by 37.6 percent.

The report said that the major 10 revenue spinners contributed 86.4% of sales tax on domestic stage during first half of 2011-12.

The collection from telecom, second major source of sales tax domestic, has registered a low growth of 2.7%. One reason of low growth is around 2% increase in the input adjustment.

The collection from natural gas has declined by 8.9% mainly due to increased refunds by 17.1% and decline in the taxable sales by 4.3%. In March, 2011, the exemption from fertilizer was withdrawn which has also yielded robust amount of Rs. 9.9 billion during first half of 2011-2012. A negative growth of 22% recorded in the collection from other services.

A robust growth of 141.4% has been recorded in the collection of sugar by 141.4%. The major reason for this huge growth is lower input-output ratio of 25% in current fiscal as compared to 38.2% in the same of period of last year. The collection of cigarettes exhibited 6.3% growth in the collection during July-December, 2011-12 as compared to corresponding period last year.

The reason of this modest growth was low growth of 2.5% in the taxable sales.  Moreover, production of cigarettes was also dropped by around 6% during July- December, 2011-12. The collection from beverages has improved by 13.5%. The reason for this growth can be attributable to increased taxable sales by 35.9%.

It is encouraging that the ST (domestic) collection from tea grew by 7.6% over the collection of previous year.  Although taxable sales of tea grew by 35.9% but increased input adjustment increased by 15.3% which has affected the collection from this source. It may also be noted that the production of blended tea has also grown by 22% during this period.

A decline of 59.5% has been manifested in electrical energy as input/output ratio has crossed 100% during current fiscal as compared to 94.5% during first half of 2010-11. Moreover, 48.3% increase in the payment of refunds has also affected the net collection of electrical energy.