The Federal Board of Revenue (FBR) has revealed that it disbursed refunds and customs rebates amounting to Rs335.6 billion in the fiscal year 2022-23, marking a decrease of 11.4 percent compared to the Rs378.92 billion disbursed in the previous fiscal year, 2021-22.
As reported by BR, data from the FBR indicates a notable 68 percent decrease in income tax refund payments in 2022-23 as compared to 2021-22. Similarly, sales tax refund payments showed a 2.9 percent decrease during the same period.
Contrastingly, payments of customs duty rebates experienced a 5.1 percent increase in 2022-23 compared to the previous fiscal year.
Sales tax collection for 2022-23 amounted to Rs2,591 billion, reflecting a Rs59 billion increase from the collection in 2021-22. Sales tax contributed approximately 36.2 percent to the total tax collection.
Despite a growth rate of 2.3 percent during 2022-23, the overall economic slowdown and fiscal stabilization measures persisted. This occurred despite an increase in the sales tax rate from 17 percent to 18 percent reaching 25 percent for certain luxury items.
The sales tax at the import stage, constituting more than 61 percent of the overall sales tax collection, saw a 7 percent negative growth attributed to a 5.1 percent decline in imports. Nevertheless, the sales tax target was achieved to the extent of 92.3 percent during the reviewed period.
The net collection of Sales Tax Domestic (STD) witnessed a substantial increase of 23.2 percent, amounting to Rs975.1 billion during 2022-23 compared to Rs791.5 billion in 2021-22.
Around 54 percent of sales tax domestic collection came from ten sectors, including electrical energy, petroleum products, sugar, cement, natural gas, cigarettes, and aerated beverages.
Electrical energy emerged as the leading contributor with a 17.8 percent share, reflecting an increase due to higher tax rates and power tariffs. The sales tax share on local supplies of petroleum products also rose to 12.1 percent in 2022-23 from 9.9 percent in 2021-22.
Sales Tax on Imports (STM), a crucial component of federal tax receipts, recorded a net collection of Rs1,616 billion during 2022-23, indicating a negative growth of (7.2) percent compared to Rs1,741 billion in 2021-22.
The top 10 commodities of sales tax imports contributed 67 percent to STM collection, with petroleum being the leading source, constituting an 18 percent share. Collections from petroleum products saw a negative growth of (38.7) percent, while edible oil recorded a significant growth of 44.2 percent. Vehicles, however, experienced a notable negative growth of (46.7) percent in 2022-23, according to FBR data.
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