ISLAMABAD: The government has estimated the tax to GDP ratio on the basis of collection by Federal Board of Revenue (FBR) likely to increase 11.2 percent in fiscal year 2017-18 as compared with 10.5 percent in the previous fiscal year.
According to Economic Survey of Pakistan 2017-18, the FBR collection has been estimated at Rs4,013 billion for the current fiscal year as compared with Rs3,368 in the previous fiscal year.
The survey presented tax performance of July – February 2017-18. It said FBR tax revenues grew by 8.2 percent to Rs3,367.9 billion during FY2017 against an impressive growth of over 20 percent during FY2016.
Accordingly, FBR tax to GDP ratio reduced to 10.5 percent in FY2017 against 10.7 percent recorded in FY2016.
During the first eight months of current fiscal year, FBR has been able to collect around Rs 2,257.6 billion against Rs 1,921.7 billion during the same period of FY2017, posting a growth of 17.5 percent.
All the taxes have exhibited positive growth during the period July- February, FY2018. FBR annual revenue target for FY2018 has been fixed at Rs 4,013 billion which requires a growth of around 19.15 percent over and above the actual tax receipts of Rs 3,367.9 billion generated during FY2017.
The net collection of direct taxes has registered a growth of 12.7 percent during the first eight months of 2017-18. The net collection has gone up from Rs 753.3 billion to Rs 848.9 billion. Bulk of the tax revenues of direct taxes is realized from income tax.
The major contributors of income tax are withholding tax, voluntary payments and collection on demand.
The gross and net collections of indirect taxes have witnessed growth of 21.5 percent and 20.6 percent respectively.
It is accounted for around 62.4 percent of the total FBR tax revenues. Within indirect taxes, net collection of sales tax increased by 19.4 percent. The gross and net sales tax collection during July-February, FY2018 has been Rs 955.0 billion and Rs 914.2 billion respectively showing growths of 20.7 percent and 19.4 percent respectively. In fact, around 57 percent of total sales tax was contributed by sales tax on imports during July- February, FY2018, while the rest was contributed by domestic sector.
Within domestic sales tax collection, the major contribution came from POL products, cement, natural gas, sugar, aerated water, cigarettes etc.
On the other hand, mineral fuels, vehicles (other than railway), iron and steel, electrical machinery, plastic and articles, animal and vegetable oils, organic chemicals etc contributed significantly to collection of sales tax from imports.
The collection of federal excise duties (FED) during July-February, FY2018 has recorded 11.9 percent growth. The net collection has stood at Rs 121.2 billion during July-February, FY2018 as against Rs 108.3 billion during the same period last year. The major revenue spinners of FED are cigarettes, cement, services, beverages, natural gas and edible oil.
Customs duty collection has registered growth of 26.9 percent and 26.8 percent in both gross and net terms respectively. The net collection has increased from Rs 294.6 billion during July-February, FY2017 to Rs 373.4 billion during July-February, FY2018.
