Provincial sales tax collection dreary at Rs44.12bln in Q1

KARACHI: The revenue collection by provincial tax authorities remained stagnant at Rs44.124 billion during the first quarter of the current fiscal year, Ministry of Finance said in the financial operation for July–September 2018.

The provinces had collected Rs44.11 billion sales tax on services in the corresponding quarter of the last fiscal year.

Sources in the Sindh Revenue Board (SRB) said on Saturday that the growth was negatively impacted due to transition of the government after general elections held in July this year.

The provinces have been empowered to collect sales tax on services through 18th Amendment of the Constitution in the year 2010.

The SRB was the first revenue authority established by the Sindh government to collect tax on services.

Since the establishment, the Sindh Revenue Board attained around 25 percent average growth in revenue collection and reached over Rs100 billion during the fiscal year 2017/18.

However, it collected Rs20.64 billion during the first quarter of the current fiscal year as compared to Rs18.73 billion in the corresponding quarter of the last fiscal year, showing a growth of 10.19 percent.

Sources in the Sindh Revenue Board expressed the hope that the revenue collection would improve in the coming months, owing to the measures taken by the board.

The SRB is focusing on non-compliant taxpayers, as it suspended sales tax registration of many leading corporate entities for the recovery of arrears and non-compliance of monthly returns.

The collection of sales tax on services by Punjab, the largest province in terms of population, registered a decline of 8.7 percent to Rs19.84 billion during the first three months of the current fiscal year as compared to Rs21.73 billion collected in the same period of the last fiscal year.

The Punjab government has launched initiatives to net new taxpayers. Tax experts said the revenue declined due to slowdown in the economy.

The Khyber Pakhtunkhwa revenue authority also failed to register revenue collection growth.

The statistics showed the revenue collection of sales tax on services posted 4.36 percent decline to Rs2.279 billion during the first quarter of the current fiscal year as compared to Rs2.383 billion in the corresponding quarter of the last fiscal year.

However, the newly-established revenue board of Balochistan government collected Rs1.36 billion during the period under review as compared to Rs1.26 billion in the first quarter of the last fiscal year.