The Regional Tax Office (RTO) has witnessed a drop in revenue generation from imports by 25 percent due to the spread of coronavirus worldwide, said sources.

They pointed out that the real impact of corona would be more visible by the end of last quarter of the fiscal year. Already, a dent has taken place in revenue generation through imports due to the currency depreciation which made the imports expensive. The sources added that imports of raw materials for the textile sector and metal industry would be affected heavily. The impact could be even more serious in case a lockdown-like situation develops in the country, they apprehended.

Since China is a major trading partner of Pakistan, revenue generation through import-related taxes has registered a drop during the ongoing quarter (Jan-March 2020) of the current fiscal year, they said.

When contacted, Collector Model Customs Collectorate (MCC) Amjad-ur-Rehman verified the number and stated the revenue generation through imports has already shed by 25 percent, as the arrival of five ships has been cancelled since early March. China has probably opened two ports recently to resume trade and the consignments would likely to reach by the end of April, he added. He said the number of Goods Declarations (GDs) has reduced by 200 over the last 17 days of the current month.

He said the Federal Board of Revenue (FBR) had sought comments in case the magnitude of imports is cut off from China. "We had suggested imposing Free Trade Agreement (FTA) rate and start import of goods from other destinations raw materials. However, this suggestion could not be fruitful because of the spread of corona virus all around the world," he added.

He also dispelled the impression that there is a delay in clearance of imported goods, saying that the volume of imported goods has reduced to an abnormal level. The only instruction we have received is that the import of live animals has been banned from throughout the world. Earlier, this ban was restricted to China, but now it has expanded to the world over. "We had received these instructions about a month back," he added.

However, in a situation where the RTO is losing revenue due to various factors, revenue generation from domestic sources has registered a growth of over 40 percent, especially through sales tax returns with the registration of new taxpayers. It may be noted that the CRTO had launched a campaign from December 2019 to increase the number of new taxpayers through physical verifications of those not filing their returns well in time and identification of those manufacturers not filing returns altogether. The CRTO had also coordinated with the Lahore Electric Supply Company (LESCO) to identify major taxpayers not registered with the tax machinery. It had also blacklisted the consecutive non-filers and all such measures resulted in an increase in the number of tax payment filers by 33 percent in the month of January 2020 comparing to January 2019, month on month basis.