ISLAMABAD: Federal Board of Revenue’s (FBR) reliance on indirect tax is increasing day by day as the department has collected 62 per cent, Rs 675 billion, through indirect taxes in first four months of the current fiscal year 2017-18.
FBR collected Rs 1,033 billion in four months which includes 380 billion through income tax, Rs 463 billion in sales tax and Rs 180 billion in customs duty. The department collected Rs 161 billion more than the correspondent period of previous year, the collection in last year was recorded Rs 870 billion. Similarly, with the addition of Rs 1 billion in October, the government paid Rs 42 billion refunds to the business community.
The department collected Rs 267 billion in October 2017 which shows an increase of more than 12 per cent over the collection for October 2016.
The official told this scribe that sales tax, customs duty and excise are considered as indirect taxes FBR’s reliance is increasing on such taxes day by day.
It is also worth mentioning here that last month the army chief had also cautioned government on indirect taxes. He stated that during the last year, tax recovery was around 39 per cent, which included a 95 per cent reliance on indirect taxes.
Moreover, during the first quarter of the current fiscal year, the collection was recorded at Rs 765 billion after paying the Rs 41 billion refunds.
Sources told Pakistan Today that tax collection on importable and domestic goods was recorded 51 per cent and 49 per cent respectively during the first three months. The tax collection on import and domestic items were recorded 42 per cent and 58 per cent in three months of 2016-17.
According to International Monetary Fund (IMF) report, Pakistan is heavily reliant on indirect taxes collected from an extremely narrow tax base. The main sources of tax revenue are income taxes (CIT and PIT) and indirect taxes (GST, customs duties and excises), contributing over 92 per cent of total tax revenues.
FBR Spokesperson Dr Iqbal declined to comment on this. He stated that I do not have a bifurcation of tax collection so I cannot comment on the issue.
