The Central Board of Revenue (CBR) has witnessed growth in import of vehicles in July-August 2005-06 after reduction in tariff, resulting in overall growth of customs duty, whereas sales tax refund payments decreased following zero-rating on inputs used by five sectors.
A CBR analysis on revenue collection (July-August 2005-06) showed that growth in import of vehicles was tied to growth in import-related taxes as well. The import value of vehicles and parts increased by 66.7 percent in July-August 2005-06, while overall import related growth increased by 69.1 percent.
The analysis showed that the significant aspect of revenue collection in the first two months of current fiscal year has been reduction in refund payment to five export-oriented industries after zero-rating of the entire input chain.
The overall sales tax refund payment declined by Rs 4.7 billion during the two months. In percentage terms, the refund payments diminished by 44.9 percent in July-August 2005-06 as compared to corresponding period of last year. The refund payment related to textile sector declined by 35 percent in July 2005.
The overall revenue collection in July-August (2005-06) exceeded the target by Rs 2.8 billion. The net collection of Rs 78.2 billion reflected a growth of 20.6 percent over July-August 2004-05. Except Federal Excise Duty (FED), there has been a double-digit growth in direct taxes, sales tax at import stage and domestic consumption and customs duty.
There has been growth of 16 percent in direct taxes, 24.3 percent in sales tax, 6.7 percent in FED and 23.6 percent in customs duty.
Collection for August 2005 exceeded the target by Rs 2.6 billion. The CBR has maintained the growth momentum in direct taxes, sales tax and customs duty.
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