The sales tax remained the top revenue-generating source of the federal tax receipts during the first six months (July-December) of 2020-21, as revealed by the FBR report on revenue analysis.
The report said that the sales tax constitutes around 42 percent of the total net revenue collection. The collection during the first half of 2020-21 has been Rs. 914.2 billion, against Rs. 857.5 billion in the first half of 2019-20. The overall sales tax collection had grown by 6.6 percent, and around Rs. 57 billion of a higher amount has been collected during the first half of 2020-21, as compared to the collection in the corresponding period the previous year. The domestic sales tax collection had recorded a growth of 3.2 percent, and the collection of sales tax on imports had recorded a growth of 9.7 percent.
ALSO READ
PSX Just Broke All-time Trading Volume Record But Here’s What Really Happened
Within the sales tax, the share on domestic was 46.4 percent and that on import was 53.6 percent during the first half of 2020-21. The share of sales tax domestic has slightly declined as compared to the sales tax import during the period under review.
Sales Tax Domestic Collection: The overall net collection of Sales Tax Domestic (STD) was Rs. 423.8 billion against Rs. 410.7 billion in the first half of 2019-20, and the net collection had grown by 3.2 percent. In absolute terms, an Rs. 13.1 billion higher amount of revenue has been collected during July-December 2020-21, as compared to July-December 2019-20.
Major Heads of Sales Tax Domestic: The collection of sales tax domestic is concentrated in few commodities. The major commodities are petroleum products, electrical energy, textile sector, sugar, food products, cigarettes, cement, aerated water/beverage, and iron and steel products. The share of the major 15 items has jumped from 65.8 percent to 69.4 percent, showing a greater concentration on fewer items.
The POL products included oil refineries, oil marketing, and oil exploration is the top revenue contributor of sales tax domestic. The second major item is electrical energy with around a share of around 15 percent in the sales tax domestic collection. The share of sugar has increased from 3.8 percent to 5.7 percent, cotton yarn — 3.3 percent to 4.5 percent, and cement from 2.5 percent to 3.2 percent.
ALSO READ
Rupee Continues Landslide Against the US Dollar Second Week in a Row
Regarding growth, the collection from the oil marketing companies grew by around 271 percent, sugar by 80 percent, cotton yarn by 62.2 percent, cement by 51.5 percent, and electrical energy by 40.8 percent. Meanwhile, items like oil refinery, oil exploration, and withholding agents sector had negative growths.
The report detailed that the top 15 commodities of the sales tax import have contributed a major chunk of 80 percent in the import collection. The detailed data indicates that nearly 50 percent of the sales tax on imports is contributed by POL products, Iron and Steel, machinery, plastic, and animal/vegetable fats. Like the sales tax (domestic), petroleum is the leading source of sales tax collection at the import stage as well. Its share in the sales tax imports is around 22 percent. During the first half of 2020-21, the collection from the POL products was Rs. 109.8 billion, against Rs. 127.6 billion during the first half of 2019-20, reflecting a negative growth of 14.0 percent, the FBR added.
The post Sales Tax Was The Top Revenue Source of Federal Tax Receipts: FBR appeared first on .
