Change in POL prices caused shortfall in GST collection: FBR

MUSHTAQ GHUMMAN

ISLAMABAD: The Federal Board of Revenue (FBR) has reportedly claimed that the main reason behind the shortfall in sales tax collection during the first seven months (July-January) of current fiscal year was very little change in price of petroleum products, official sources told Business Recorder.

This was disclosed at a meeting of Economic Coordination Committee (ECC) of the Cabinet held on March 2, 2017 under the chairmanship of Finance Minister, Senator Ishaq Dar. According to the Finance Ministry the stock of wheat [as on 28th February, 2017] being 5.52 million tons, was stated to be sufficient for daily releases to the flour mills by the Provincial Food Departments and PASSCO. Stock of sugar [as on 22nd February, 2017] stood at 3.20 million tons.

Minister for National Food Security and Research, Sikandar Hayat Bosan informed the meeting that the sugar production in the country was good due to which sugar price in the local market had declined. Availability of urea and DAP fertilizers was reported at 4.439 million tons and 1.559 million tons, respectively. Stock of various POL products [as on 1st march, 2017] averaged 30 days.

Performance of Large Scale Manufacturing sector was reported at 3.90 percent in July-January 2016-17 as compared to 3.94 percent in the same period of last year. It was stated that the export growth had decreased by 1.31 percent while imports increased by 9.17 percent registering a trade deficit [on year-on-year basis] amounting to $ 13.222 billion during July-January 2016-17 as compared to $ 10.914 billion in the corresponding period of last year.

The ECC was informed that remittances during July-January 2016-17 were

$ 10.9464 billion in 2016-17 compared to $ 11.1547 billion during the same period last year, registering a decline of 1.9 percent.

Gross Foreign Exchange Reserves were reported [as on 1st March, 2017] as $ 22.027 billion of which SBP held $ 17.050 billion, whereas commercial banks held $ 4.977 billion. FBR tax collection during July-January 2016-17 stood at Rs.1692.20 billion as compared to Rs.1572.60 billion in the same period of last year, thereby posting an increase of 7.6 percent.

The ECC was further informed that since May 11, 2013 PSX 100 Index has registered an increase of 145.99 percent. Market capitalization also increased considerably in terms of rupee as well as dollars by 92.38 percent and 80.63 percent, respectively. The Performance of Pakistan Stock Exchange (PSX) was remarkable showing an increase of 334.25 percent in the PSX 100 Index since 1st January 2012.

According to sources, ECC observed that sales tax collection during July-January 2016-17 remained nearly flat as compared to last year. However, the officials of FBR clarified that the shortfall in sales tax collection was mainly due to very little change in the petroleum products prices during the current fiscal year.