Tax collection from POL products is mainly responsible for this increase. While our government has increased exorbitantly the taxes on diesel which has increased the inflationary pressures directly affecting the masses.. our FBR is hailing this as an achievement. They need to concentrate more on taxing the rich under taxed segments rather than just increasing the tax on POL prices.. which directly effect the poor masses.
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Tax collection growth during July-December 2011 highest in region
Shahnawaz Akhter
KARACHI: The growth in revenue collection by the Federal Board of Revenue (FBR) during the first half of FY12 is claimed to be the highest against the tax collection by other regional countries.
“The revenue collection for the first half of 2011/12 is the highest as per the study conducted by the revenue authority,” said Shahid Hussain Asad, Member Inland Revenue (IR), Federal Board of Revenue (FBR), on Wednesday.
The FBR collected Rs842 billion during the first six months of the current fiscal year against Rs662 billion collected in the corresponding months last year, depicting a growth of 27 percent.
The study compiled the data of growth in tax collections of regional countries, including India, Hong Kong, Singapore, Malaysia, Bangladesh, Turkey, etc.
“The study reveals that India has the highest growth of 22 percent, while other countries have nominal growth,” the member added. The member, however, said that the efforts still required to maintain the growth target by the end of the current fiscal year to meet gigantic target of Rs1,952 billion and improve the tax-to-GDP ratio.
The tax-to-GDP ratio in Pakistan is the lowest in the world having single-digit ratio, the World Bank reported in its latest study.
The member attributed the revenue uptick, especially in direct taxes, which increased by 30 percent, to broadening the tax base and monitoring of the withholding tax. “Monitoring of withholding taxes resulted in Rs14 billion during the period,” the member added.
Regarding broadening the tax base efforts, he said, the number of taxpayers has been increased, but the revenue impact is small.
“But it has long-term impact on the revenue collection, he added.
The FBR officials in different tax departments, however, said that the rise in the tax collection is mainly due to massive fall in the rupee value and higher prices of POL products.
“The fall in the rupee value resulted in increased import duty,” an official said on the condition of anonymity.
“Similarly, the rise in prices of POL products also gave boost to sales tax collection,” the official added.
The rupee fell over four percent since the start of the current fiscal year as its value was at 85.97 to a dollar on June 30, but it fell sharply to a record low of 90.20 on Tuesday.
Another FBR official said that the recovery through audit is another major contributor towards revenue collection, besides collection of advance tax also gave boost to the collection efforts.
The FBR collected 43 percent of the total revenue collection target and still required Rs1,110 billion in the remaining six months of the current fiscal year.