Advance tax collection up 5.5 percent to Rs95 billion

KARACHI: The Federal Board of Revenue (FBR) has registered a 5.5 percent growth in advance income tax collection during the first half of the current fiscal year, officials said on Friday.

The collection during July-December 2018 stood at Rs95 billion, compared with Rs90 billion in the same period of the last fiscal year, they said.

The Corporate Regional Tax Office (CRTO) Karachi has been empowered to collect advance income tax on Customs clearance of imported goods at sea ports.

The FBR officials said the latest growth was lower than the projected collection, primarily due to the Chinese government’s decision to restrict its exporters for realisation of receipts. They said the imposition of regulatory duty also hampered the revenue collection growth.

The FBR issued SRO 1265(I)/2018 on October 16, 2018 to introduce new regulatory duty regime that was approved through the Finance Supplementary Act, 2018.

The regulatory duty has been imposed to discourage imports of non-essential and luxury goods to curtail trade deficit.

The regulatory duty resulted in reduction in imports such as motor vehicles and mobile phones, which declined 50.45 percent and 18.70 percent, respectively, in December 2018.

The total import came down by 8.88 percent to $4.44 billion in December 2018, compared with $4.87 billion in the corresponding month of the last year. The reduced import also narrowed the trade deficit by 18.62 percent during the period under review.

Besides, the officials said, massive depreciation in the rupee value also discourages imports, which subsequently reduced the advance tax collection.

The collection from imported goods at the Karachi Port remained flat to Rs64.2 billion during the first half of the current fiscal year, compared with Rs64.06 billion in the corresponding period of the last fiscal year.

However, collection at the Port Qasim improved 17 percent to Rs30.82 billion as against Rs26.12 billion.

The collection under this head is the second largest after collection of withholding tax from contracts.

The FBR collected Rs218.76 billion as advance income tax on imports during the fiscal year 2017/18, compared with Rs197.04 billion in the preceding fiscal year, posting 11 percent growth.

The officials said further decline in the collection under this head would impact the overall collection of the revenue board.