Additional Rs209 billion collected in first 5 months: FBR

ISLAMABAD: The Federal Board of Revenue (FBR) says it collected additional Rs209 billion during the first five months of this fiscal year 2019-2020 due to structural changes in taxation system, procedures and withdrawal of exemptions.

The FBR data shows that these much-needed reforms in taxation system are already producing fruit despite a huge import compression of around $5billion and slowingdown of growth. The FBR estimates a tax cost of Rs56bn for each $1billion-cut in imports.

It is pertinent to mention here that the unprecedented initiatives were introduced in in the budget 2019-20 to remove structural flaws in sales tax, federal excise duty and income tax. The FBR collection grew by 16.4 per cent in the first half of this fiscal year as income tax, sales tax and the federal excise duty (FED) showed a growth of 19percent, 25percent and 23percent respectively. The highest growth rate has been registered in the sales tax regime.

Sectoral contribution shows that the wholesale and retail trade contributes only Rs16 billion in tax revenues despite having 18 percent share in Gross Domestic Product (GDP). The agriculture sector with 18 percent share in GDP has a negligible contribution in taxes. Similarly, informal service sector has a share of 20 percent in GDP but is not contributing much to national kitty.