Sales tax remained the main revenue generator in 2019-2020 with a 40.0% share, followed by direct taxes at 38.1%, customs at 15.7% and taxes. Federal Specials (FED) 6.3 percent.
In fiscal 2019-2020, the share of rates and the Fed declined, while the share of direct taxes, the Fed and sales tax increased slightly.
Petroleum products remained the top source of income in 2019-2020, according to an RBF report released Monday. POL products were the main source of sales tax income (import phase); sales tax, domestic consumption and customs duties in the import phase in 2019-2020.
The collection of the national sales tax is concentrated on a few products. The main products are
- Oil products
- Electrical energy
- Textile sector
- Food products
- Water / soft drinks
- Iron and steel products
- Independent energy projects
The above products accounted for about 73.2% of the national sales tax.
POL products, the main source of income, showed a negative trend of 5.6% in the 2019-2020 fiscal year with a share of 32.6%. The collection of cement, iron and steel and PPIs also showed a negative growth during the period analyzed. On the other hand, the collection of textiles, sugar and electrical energy showed very good growth during the 2019-2020 financial year.
The top 10 import tax (STM) products contributed a large proportion, 74.4%, to STM’s revenues. Detailed data indicate that more than 55% of STM comes from POL, steel products (Chapter 72), machinery (Chapter 84 and 85) and plastics (Chapter 39).
Just like the (national) sales tax, petroleum is also the main source of sales tax on imports. Its share of sales tax imports is approximately 26.4%. In fiscal year 2019-2020, POL product collection amounted to Rs. 231.3 billion compared to Rs. 221.3 billion in the 2018-2019 fiscal year, a growth of 4.5%.
About 58.3% of customs duty collection was paid by ten of the major products grouped in the chapters of the PCT. Of the top ten products, POL products grew by 4.9%, electrical machines 41.7% and tea and coffee 22.5%. The decrease in imports was the main cause of the decrease in the collection of the various items. POL products made the largest contribution to the rates.
In 2019-2020, cigarettes, cement, and beverages are the largest producers of Fed revenue. The imposition of federal excise duties not only aims to collect tax revenue, but also to discourage the use of certain unhealthy materials such as cigarettes. In partnership with the Department of Health, other unsanitary issues could be identified with the aim of taxing the FED in the coming years to discourage their consumption, the FBR report adds.
Withholding taxes contribute a large part, namely 72% of the total income tax. The WHT collection in the fiscal year 2019-2020 was Rs. 1,091.5 billion compared to Rs. 960.2 billion, indicating a growth of 13.7% (Table 8).
The top ten elements of withholding tax that contributed approximately 84% of total WebMD revenue are:
- The dividends
- Banking interests
- Cash withdrawal
In terms of growth, telephone traffic increased by about 218%, followed by bank interest (120.4%), wages 69.4%, electricity (27.8%), exports (11.6%). During the same period, the main collection of cash withdrawals, imports and dividends showed negative growth.