The Federal Board of Revenue’s (FBR) revenue collection has showed robust performance in the third quarter of the current fiscal year 2009-10 but stood at 65.9 percent of the annual budget target, State Bank of Pakistan report stated on Tuesday.
The growth in taxes was large due to increased collection under the head of direct taxes and import-based indirect taxes. FBR is required to collect more than Rs 157 billion per month on average in the remaining month of FY10 for achieving the target.
Growth in direct tax collection, which remained subdued in first half of FY10, accelerated to 11.3 percent during July to March FY10. Collection of the direct taxes during January to March 2010 remained robust as compared with the same months of last year. This reflects the effect of the extension announced by the FBR in the due date of filing the income tax returns.
The FBR administration introduced a change in the advance tax payment system according to which the quarterly advanced tax payment is now to be paid by the 15th of the following month. As a result, a shortfall in direct tax collection could be seen compared to interpolated monthly targets in last month of each quarter and a corresponding increase in next month, like, October 2009, January 2010 and expectedly in April 2010.
Collection from indirect taxes also improved in the third quarter of FY10 largely due to increase in tax receipts from import. During July to March FY10, indirect tax collection reached 69.7 percent of the annual budget target reflecting 11.8 percent yearly growth. Within indirect taxes the performance of sales tax remained encouraging. During July to March FY10 sales tax collection amounted to 74.3 percent of the annual target. This contributed by sales tax from imports showed a growth of 17.4 percent during July to March FY10 as compared with 3.9 percent growth in the corresponding period last year.
Although sales tax collection from domestic goods and services has not been encouraging so far as compared to last year, a revival in the economy coupled with increase in prices of electricity are likely to increase collection from domestic sources in the months ahead.
The Federal Excise Duty (FED) registered the lowest growth of all the FBR taxes during July to March FY10. Unlike other FBR taxes, collection from FED during the third quarter of FY10 remained slightly below the first two quarters of FY10.
Growth in customs duty collection, which remained negative up to first half of FY10, turned positive during January 2010, resulting in an overall growth of 6 percent during July to March FY10. This is in line with the recent growth in rupee value on imports. A higher growth in customs duty than the growth in its base - imports - indicates the buoyant nature of the tax. However, actual performance of this tax can be analysed with disaggregated information of dutiable and non-dutiable imports, which is not available yet.
Source :- dailytimes.com.pk