Sales tax collection on imports increases by 21% to Rs400 billion during the first half of FY20

An increase in sales tax collection has achieved due to the cancellation of the zero-rated sales tax.

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  • Sales tax revenue from the imported products has increased by 21% to 400 million during the first half of the current fiscal year.
  • From July 1, 2019, the zero-rated tax sale was substituted with a standard tax of 17%.
  • A growth in sales tax collection has been observed regardless of the drop in total trade volume during the current fiscal year, according to the sources.

collection

According to the sources at the LTU Karachi, sales tax collection from the imported products has increased by 21% to 400 billion during the first half of the current fiscal year.

Large Taxpayers Unit (LTU) Karachi and Federal Excise Duty (FED) collected Rs328.16 billion from imports during the same period last year.

Standard tax

An increase in sales tax collection has achieved due to the cancellation of the zero-rated sales tax. From July 1, 2019, the zero-rated tax sale was substituted with a standard tax of 17%.

According to the report issued by the FBR, the zero-rated sales tax formed ambiguity, and unintended people were gaining benefits from the tax incentives. The FBR uncovered corruption in imports of fabric and processed fabrics regarding the zero-rated facility.

A growth in sales tax collection has been observed regardless of the drop in total trade volume during the current fiscal year, according to the sources.

During the first quarter of the current fiscal year, imports decreased by 19.27% to $19.04 billion as compared to $23.59 billion in the same period last year.

Customs collectorates in Karachi

 Port Qasim Collectorate

Growth in FY 2019/2020

33%

Sales tax during July-December 2019

Rs190.6 billion

Sales tax during July-December 2018

Rs143 billion

 

Customs Collectorate Appraisement (East) Karachi

Growth in FY 2019/2020 9%
Sales tax during July-December 2019 Rs110 billion
Sales tax during July-December 2018 Rs103 billion

 


Also See: 

Pakistan’s Food Imports Decrease, Exports Increase In First Quarter Of FY19

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