The top 10 items – eight of them related to energy and edible oil – contributed one-third of import taxes, or Rs409 billion, in the first five months of current fiscal year, which was the key reason behind the constantly high prices of these commodities in Pakistan, reports Tribune.
Federal Board of Revenue (FBR) data showed that the Rs409 billion revenues generated during the July-November 2021 period were 137% higher than the collection made in the same period of last fiscal year. This shows the impact of increase in tax rates, higher commodity prices and higher imports.
Prime Minister Imran Khan on last Sunday kept petrol prices unchanged at a record high of Rs146 per litre by increasing the tax rate by over Rs6 per litre.
During the July-November period of current fiscal year, the FBR collected Rs409 billion in taxes at the import stage on petrol, natural gas, crude oil (a new tax), high-speed diesel, bituminous coal, RBD palm oil, palm olein, furnace oil, seed and cotton, according to the FBR statistics.
Major differences were the imposition of 17% sales tax on crude oil, increase in customs duty on import of petrol from 5% to 10% and changing tax rates for palm oil.
The Rs409 billion revenues were equal to 33% of the total taxes of Rs1.2 trillion collected at the import stage over the past five months. They were 17.6% of the total tax collection of Rs2.3 trillion in the July-November period of FY22.
Data compiled by the FBR relating to duties and taxes collected at the import stage highlights heavy indirect taxes that are badly hurting consumers, particularly the lower income groups. Taxes that are paid on their domestic sales are over and above the collection of Rs409 billion.
Due to the increasing share of import taxes, the share of indirect taxes in the overall tax collection has gone up to 67%, which is hurting the poor and middle income groups more than the rich class.
Pakistan’s imports are also poised to significantly increase due to various factors like expansion in economic activities and high food imports because of a drop in their domestic production.
The central bank had projected $61 billion in imports for the current fiscal year but the commerce ministry estimated a record $72 billion in imports, which now seems a lower number.
