Services tax collection surges 28pc to Rs109.6bln in first half

KARACHI: The collection of sales tax on services by the provinces increased 28.4 percent during the first half of the current fiscal year owing to accelerated economic activities after ease in coronavirus lockdown, official data showed.

According to data released by the ministry of finance a day earlier, the collection of sales tax on services increased to Rs109.62 billion during the first half of the current fiscal year compared with Rs140.7 billion in the corresponding half of the last fiscal year.

Tax experts said all the economic activities remained standstill due to lockdown during March to June last year. However, the demand for services by various sectors increased after the lockdown was lifted.

The provinces were empowered to collect sales tax on services under the 18th amendment into the constitution in 2010. Sindh was the first province to make legislation for imposing sales tax on services within its jurisdiction.

The collection statistics revealed that Punjab remained the highest collector of sales tax on services.

The Punjab collected Rs72.6 billion during the first half of the current fiscal year compared with Rs49.9 billion in the corresponding half of the last year, showing an increase of 45 percent.

The Punjab initiated various facilitations to attract service providers in various sectors. Punjab Revenue Authority has been assigned to collect Rs121 billion as an annual target for fiscal year 2020/21.

Sindh collected Rs54.7 billion during July – December 2020/21 compared with Rs47.1 billion in the corresponding half of the last fiscal year, showing an increase of 16 percent. There was variation in revenue collection of Sindh in the statistics of the federal finance ministry.

According to Sindh Revenue Board (SRB), it had collected Rs57 billion during the first six months compared with the collection of Rs49 billion during the same period of the last fiscal year.

The SRB said it would focus on achieving the assigned revenue target of Rs135 billion for the current fiscal year, despite all the adverse factors such as low economic growth and the resurgence of COVID-19.

The collection of sales tax on services by Khyber Pakhtunkhwa registered a 21.6 percent increase to Rs10 billion during the first half of the current fiscal year compared with Rs8.2 billion in the same half of the last fiscal year.

However, Balochistan posted a decline of 23 percent in sales tax collection to Rs3.47 billion during the July-December period compared with Rs4.5 billion in the same period of the last fiscal year.