ISLAMABAD: The Federal Board of Revenue witnessed Rs8 billion decline in sales tax collection from petroleum products during the first half of this fiscal year from a year ago because of lower oil prices.
But this loss was partially compensated by an increase of 4.7 per cent in sale of domestic taxable petroleum products during July-December 2014 from a year ago.
Official figures, compiled by the FBR, showed that in absolute terms, taxable sales of POL products were Rs16 billion higher than in July-December 2013-14 period.
Increased demand due to lower prices pushed up overall POL sales.The closure of CNG stations in many parts of the country also played a role as consumers shifted to petrol as a substitute.
The FBR projected that the petroleum products imports will decline by around $4 billion (Rs400bn) in this fiscal year.
On the basis of this assumption, an approximately Rs68bn revenue loss impact has been calculated for the whole fiscal year by the tax officials.
However, share of POL products, the top revenue spinner, declined from 43.7pc in first half of the year from a year ago to 40.1pc. During the same period, share of oil marketing companies increased from 1.8pc to 4.9pc.
Like domestic sales tax, petroleum is a leading source of sales tax collection at import stage as its share in sales tax imports is 29.4pc.
Data indicates that the sales tax collection from POL products at import stage was Rs80.9bn in the first half of the current fiscal year against Rs88.9bn in the July-December period of previous year, reflecting a decline of 8.9pc.
This was mainly because of 8.4pc decline in import value of POL products during the period under review.
Sectoral contribution of sales shows that 10 major items, including POL and natural gas, shared 74pc of the total net domestic sales tax. This reflects a narrow tax base.
The collection of sales tax has been highly concentrated in few commodities. This is confirmed by the fact that only petroleum products, fertilisers, electrical energy and natural gas contribute around 56pc of the total domestic sales tax collection.
The collection during July-December 2014-15 stood at Rs513.7bn against Rs481.7bn in the corresponding period of last year, showing an increase of 7pc.
Of the 10 major items, four registered a negative growth during July-December 2014-15. The petroleum products declined by 6.7pc, fertilisers 10.1pc, natural gas 12.4pc and beverages 15.1pc.
The collection from oil-marketing companies recorded a phenomenal growth of around 174pc, followed by electrical energy 67.5pc, sugar by around 11.6pc, cigarettes 8pc, tea 7pc and cement 4.5pc, respectively.
Nov 15, 2017 0
The 68th Anniversary of the Founding of the People’s Republic of China.
— The Daily Mail - People's Daily