Revenue collection up 27pc in Feb

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ISLAMABAD: Revenue collection rose by 27 per cent year-on-year to Rs181.906 billion in February, backed up by regulatory duties on several hundred items and hike in sales tax on petroleum products.

The figure was Rs143.224bn in the same month of last year.

The government imposed 10pc regulatory duty on 314 items earlier this month, and also increased general sales tax (GST) on petroleum products to 27pc from 22pc.

The government has already reduced the revenue target to Rs2.691 trillion from the budgetary target of Rs2.81tr, a cut of Rs119bn. Last year, the target was revised five times because of dismal performance of the tax department.

The original target for February set in the latest budget was Rs210bn, but it was later revised downward to Rs190bn.

The growth during the month was mainly driven by increase of 40.69pc in the income tax collection, followed by customs duty 30.72pc, sales tax 18.20pc, and federal excise duty 13.94pc.

In the first eight months (July-Feb) of this fiscal year, the revenue collection grew by 13pc to Rs1.519tr from Rs1.341tr during the same period of 2013-14.

The Federal Board of Revenue (FBR) now has to collect Rs1.17tr in the next four months (March-June) to meet this year’s target. It collected Rs925.75bn during the same period last year.

The narrow growth in revenue collection was despite the fact that tax officials withheld due refunds of taxpayers in July-Feb. The FBR paid out an amount of Rs47bn during the period compared to Rs72bn a year earlier, reflecting a decline of Rs25bn.

The refunds were mostly withheld under the income tax because the payment of customs and sales tax rebate/refund rose nominally.

Provisional figures show that tax collection under the head of direct taxes stood at Rs592bn in July-Feb as against Rs526bn a year ago, an increase of Rs66bn.

The collection under the head of sales tax reached Rs700bn during the eight-month period compared to Rs657bn.

The collection under the head of federal excise duty rose to Rs97bn from Rs79bn. Customs collection was Rs177bn compared to Rs151bn a year ago.

Published in Dawn, February 28th, 2015

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