LAHORE: The indirect tax collections by the Federal Board of Revenue (FBR) have grown by 20.1 percent during the first half of the fiscal year 2018, compared to a subdued growth of 6.1 percent last year.
Sources told Customs Today that this sharp growth was an outcome of both an expansion in customs duty collections as well as a rebound in sales tax collections. The custom duty collections grew by 29.6 percent, on top of 22.6 percent growth in H1-FY17, which can be traced to increase in regulatory duty on a number of non-essential consumer items, which was primarily aimed at curtailing imports to address external sector imbalance
The recovery in sales tax collections was even sharper, rising by 18.9 percent during first half of the fiscal year 2017-18 against a decline of 0.2 percent in the same period of last year, they added. The surge in sales tax collections can be attributed to increase in the prices of petroleum products in line with trends in international market and higher sales volume.
Moreover, increase in the overall sales activity commensurate with the growing economy is evident from higher consumption of cement, steel, automobiles, electronics, etc, the sources told.
In contrast to acceleration in growth of customs and sales tax, the collection from federal excise duty (FED) grew by only 5.5 percent in H1-FY18, compared to a 15.5 percent growth in the corresponding period of last year. This slowdown can be attributed to a fall in revenue collection from cigarettes by 11.8 percent, despite a substantial increase in cigarette production, it was added.