ISLAMABAD: The Federal Board of Revenue (FBR) recorded a 40% drop in sales tax (ST) collection on petroleum products (POL) in the first half of the current fiscal year, documents show officials made available to PkRevenue. com
According to official statistics, sales tax collection fell to Rs 69 billion from July to December of the 2021/2022 financial year from Rs 114.60 billion collected in the same period of last financial year.
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The decline in revenue collection from petroleum products is mainly attributed to lower sales tax rates maintained by the government to provide relief to the masses by not passing on the real increase in oil prices to international markets.
The flat rate of sales tax is 17%. However, the government has decided to keep the sales tax rate on petroleum products at the minimum level. According to SRO 1839i0/2022 issued on February 10, 2022, sales tax rates have been reduced as follows: gasoline 0.79%; 3.17% high speed diesel, 5.30% kerosene and 0% light diesel.
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The decline in the collection of sales tax on the supply of petroleum products has resulted in a decrease in the collection of sales tax on domestic supply.
Overall domestic supply sales tax collection fell 6.2% to 382.68 billion rupees in the first half of the current fiscal year from 408.13 billion rupees in the corresponding period of the previous financial year.
However, the decline in domestic sales tax collection was offset by the massive growth in sales tax collection on imports. Sales tax collection on imports jumped 75.4% to Rs 892.30 billion in the first half of the current fiscal year from Rs 508.61 billion in the second half corresponding to the previous year.
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The growth in the collection of sales tax on imports can be attributed to the sharp increase in imports and the massive decline in the value of the rupee.
The country’s import bill grew by 66.23 percent to $40.65 billion in the first half of the current fiscal year from $24.45 billion in the corresponding half of the fiscal year. previous.
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Similarly, the Pakistani rupee (PKR) fell sharply by 18.97 rupees against the dollar in the first half of the current financial year. The rupee ended down 12.04% from 157.54 rupees per dollar on June 30, 2021 to 176.51 rupees on December 31, 2021.
However, overall sales tax collection recorded 39.1% at 1.27 trillion rupees in the first half of the current fiscal year, compared to 916 billion rupees in the corresponding half of the Previous exercice.