ISLAMABAD: The Federal Board of Revenue (FBR) has paid refunds/customs rebates of Rs335.6 billion during 2022-23 as compared to Rs378.92 billion in 2021-22, showing a decrease of 11.4 percent.

The FBR’s data disclosed that the major decrease has been witnessed in payment of income tax refunds which has shown a decrease of 68 percent in 2022-23 when compared with 2021-22. Sales tax refund payments showed a decrease of 2.9 percent during 2022-23 as compared to 2021-22.

The payment of customs duty rebates witnessed an increase of 5.1 percent during 2022-23 when compared with 2021-22.

The sales tax collection stood at Rs2,591 billion during 2022-23 which is Rs59 billion higher than the amount collected in 2021-22. Sales tax contributed about 36.2 percent towards total tax collection.

The overall slowdown in economy and fiscal stabilization measures caused growth rate to remain low at 2.3 percent during 2022-23 despite increases in the rate of Sales tax from 17% to 18% and for certain luxury items 25%.

The sales tax at import stage has a share of more than 61 percent in the overall sales tax collection and it recorded 7 percent negative growth which is attributed to 5.1 percent decline in imports, thus affecting the overall collection of sales tax. The target of sales tax has been met to the extent of 92.3 percent during the period under review.

The net collection of Sales Tax Domestic (STD) was Rs975.1 billion during 2022-23 against Rs791.5 billion in 2021-22 i.e., an increase of 23.2 percent. In absolute terms Rs184 billion more revenues have been collected in 2022-23 as compared to previous period.

A large chunk of around 54 percent of sales tax domestic collection came from ten sectors including electrical energy, petroleum products, sugar, cement, natural gas, cigarettes, aerated water/beverages, etc.

The share of electrical energy has increased significantly due to the increase in tax rates and power tariff. Now electrical energy is the top contributor with a contribution of 17.8 percent share.

The sales tax share on local supplies of the POL products also increased in 2022-23 to 12.1 percent from 9.9 percent share in 2021-22. All the items in the list of major revenue spinners of sales tax domestics have recorded positive growth in 2022-23, FBR added.

Sales Tax on Imports (STM) is an important component of federal tax receipts. The net collection of STM during 2022-23 stood at Rs1,616 billion against Rs1,741 billion in 2022-23, registering a negative growth of (7.2) percent.

Top 10 commodities of sales tax import have contributed a major share, i.e., 67 percent in STM collection. Petroleum is the leading source of sales tax collection at import stage. Its share in total sales tax imports is 18 percent. During 2022-23, collections from POL products were around Rs290.1 billion against Rs473 billion during 2021-22 reflecting a negative growth of (38.7) percent. Edible oil has shown significant growth of 44.2 percent while vehicles have recorded significant negative growth of (46.7) percent in 2022-23, FBR data added.

Copyright Business Recorder, 2023