KARACHI: The Large Taxpayers Unit, (LTU) is expected to collect around Rs12 billion taxes from cement producers for 2016-17 against the last year’s tax collection of Rs 6 billion.
The Karachi LTU would collect the said amount under sales tax and federal excise duty from seven cement manufacturers, who account for 20 percent of total production in the country.
Almost all the companies recorded sales improvement after the development projects being carried out by China. Cement sales rose 8.3 percent year-on-year to 8.976 million tonnes in the first quarter of this fiscal year. The industry sold 33 million tonnes in the local market during the last fiscal year, up 17 percent over the preceding year.
Tax officials said the FBR is eying more increase in collection on account of FED rather than sales tax. They said the prime reasons are because of growing cement consumption and upward revision in FED rates through the Finance Act, 2016. The government, in the budget for 2016-17, raised FED rate to Rs1,000/metric ton or Rs50/bag from five percent of retail price on a bag (Rs22-23/bag). The FED collection from cement companies amounted to Rs2.16 billion in the last fiscal year of 2015/16 as against Rs1.72 billion in the preceding fiscal year. The FED collection climbed 173 percent to Rs1.12 billion in the first quarter of 2016-17.
Sales tax collection climbed 68 percent to Rs3.92 billion in the 2015/16. In July-September 2016-17, sale tax collection grew 52 percent to Rs889 million.
