Rs 1.02 trillion revenue collected in fiscal year 2008

[Naveed Yaseen]

SOHAIL SARFRAZ
ISLAMABAD (July 03 2008): Breaking all previous records of revenue collection, the Federal Board of Revenue (FBR) has amassed Rs 1.02 trillion during July-June (2007-08) against Rs 847.236 billion in the corresponding period last year, reflecting an overall growth of 18.3 percent.

FBR Chairman M. Abdullah Yusuf proudly shared outstanding performance of tax machinery during last one year during a press conference here on Wednesday. The FBR chief said that the board has successfully crossed the psychological barrier of Rs 1 trillion by surpassing the revised target of Rs 990 billion during 2007-08. All the individual taxes have also achieved their respective targets. Around Rs 4-5 billion more revenue is expected on compilation of final figures.

The break-up revealed that the direct taxes collection was Rs 385.3 billion during July-June (2007-08) against Rs 333.7 billion in the corresponding period last year, showing a growth of 15.4 percent, he added. He said the indirect taxes collection totalled at Rs 616.77 billion during last 12 months against Rs 513.50 billion in the same period previous year, achieving an overall growth of 20.1 percent.

The FBR chief said that sales tax collection was Rs 375.5 billion during the period under review against Rs 309.4 billion in the same period last year, reflecting an increase of 21.4 percent. The sales tax collection at the import stage was Rs 195.383 billion against Rs 175.909 billion, showing a growth of 11.1 percent. Whereas sales tax collection on domestic consumption was Rs 180.09 billion against Rs 133.487 billion, reflecting a growth of 34.9 percent.

The collection of federal excise duty (FED) was Rs 91 billion against Rs 71.8 billion last year, showing an increase of 26.4 percent. The customs duty collection stood at Rs 150.5 billion against Rs 132.3 billion in the same period last year, depicting an increase of 13.8 percent.

He said anticipating a continued high real growth of nearly 7 percent and inflation of about 8 percent, the FBR was assigned an ambitious revenue target of Rs 1.025 trillion at the start of fiscal 2007-08.

Abdullah Yusuf stated that partly due to political unrest in the country and largely due to prolonged period of power shortages and decreasing international demand, the industrial activity slowed down considerably in the country. The value-addition in the manufacturing sector dropped to 5.2 percent from 8.2 percent last year. Consequently, the FBR revenue collection also suffered badly, he added.

Moreover, he said the impact of change in the advance tax regime on payments with returns and advance payments also affected direct tax collection. Thus, in view of Rs 35 billion loss encountered till December 2007, the revenue target of FBR was reduced to Rs 990 billion in the third quarter of (2007-08), he added.

However, in view of serious resource crunch faced by the government, the FBR revenue target was raised to Rs 1 trillion in June 2008. On its part, the FBR continuously tried for a better outcome. The collection in January, February, April, and May is evidence to this claim.

Even though a stiff target of Rs 143 billion was set for June 2008, the effort of the department has yielded fruitful outcome. So far, the June collection was Rs 145 billion and we expect that this figure will increase further in the next two weeks.

The refund payments during the year have reached Rs 68 billion against Rs 82 billion last year. Direct taxes and indirect taxes refunds stood at Rs 23.395 billion and Rs 40.678 billion, respectively in 2007-08. The reduction in refunds has been due to zero-rating of sales tax and revised regime of advance tax. The reduction in overall volumes of refunds would continue in coming years as a result of policy initiatives.

About the target set for 2008-09, Abdullah Yusuf said the target has been set at Rs 1,250 billion for the next year. The required growth is nearly 25 percent for meeting this target. The new projections have been set by assuming 17.3 percent (nominal) growth in the economy and revenue measures worth Rs 71.3 billion. Taxation measures included Rs 26.7 billion worth taxes on the direct taxes side; Rs 38.2 billion sales tax and taxation measures worth Rs 6.4 billion have been taken on customs side.

The revenue collection target for 2008-09 also included administrative measures worth Rs 15 billion, including Rs 5 billion each for customs duty, direct taxes, and sales tax.

According to the FBR estimates, the new target for 2008-09 assumes improvement in tax/GDP ratio by 0.5 percent. The break-up of individual taxes showed that direct taxes target has been set at Rs 490 billion with an expected growth of 27.3 percent; sales tax Rs 480 billion, required growth 28 percent; FED Rs 115 billion, required growth 26.4 percent and target of customs duty has been set at Rs 165 billion, reflecting a required growth 10 percent.

The FBR chief also gave a tax-wise break-up of revenue collection in June 2008. He said that the FBR has collected Rs 145.864 billion in June 2008 against Rs 124.980 billion in the same period last year, reflecting an increase of 16.1 percent.

Direct Taxes collection was Rs 72.532 billion in June 2008 against Rs 61.031 billion in the same period last year, showing an increase of 18.8 percent. Within the direct taxes, collection of withholding tax at the import stage was Rs 2.2 billion in June. The collection of indirect taxes was Rs 73.33 billion during this period against Rs 63.949 billion in the corresponding period last year.

http://www.brecorder.com/index.php?id=763762