KARACHI: The Federal Board of Revenue (FBR) generated Rs547 billion under the head of sales tax imposed on supply of petroleum products during the previous fiscal year (2017-18), showing a substantial 25 percent growth year-over-year.
According to official data, FBR collected Rs437.78 billion in sales tax from domestic supply and imports in the preceding fiscal year.
Global oil prices posted significant rise during the last fiscal year. Average international oil price was $46.93/barrel in July 2017 and it climbed to average $73.22/barrel in June.
Pakistan is a net importer of petroleum products and it spent foreign exchange reserves worth $14.43 billion during the last fiscal year compared to $10.92 billion in the preceding fiscal year, up 32.10 percent year-over-year.
The FBR said the sales tax collection from oil import grew 25 percent to Rs234.21 billion in the last fiscal year. High prices of local oil products helped the revenue authorities grab additional revenue from the sector.
Petrol and diesel prices rose 35 to 40 percent during the last fiscal year on higher international oil prices.
Sales tax collection from domestic supply of petroleum products increased 25.3 percent to Rs283.03 billion in FY2018. Overall sales tax collection grew 12.2 percent to Rs1.492 trillion. Sales tax on imports and domestic supplies increased 16 percent and eight percent, respectively.
The FBR admitted inefficiency of tax officials in enhancing share of domestic sales tax collection in total revenue. “Declining share of sales tax (domestic) is not a good omen for revenue mobilisation efforts,” it said in the report. The officials must review the causes and take necessary measures to enhance revenue from the source, it added.
The share of revenue from POL products at import stage also increased to 32.4 percent from 30.2 percent when compared with collection of sales tax from all the imported goods into the country.
Share of revenue from petroleum, oil and lubricant (POL) products increased to 42 percent in total sales tax (domestic) in 2017-18 compared with share of 36.1 percent in the preceding fiscal year.
