After increasing taxes in budget the government collected Rs62 billion at the import stage on just eight energy and cooking oil products – a 100% surge over the last year – and also largely a reason behind increase in their prices in the local market, reported Tribune.
Prime Minister Imran Khan had twice approved to increase the petrol prices since July 15 and his cabinet members had claimed that he allowed the highest-ever, nearly Rs120 per litre price, due to upsurge in crude oil prices in the international market.
However, the data collected at the import stage tells a different story. The government’s decision to increase the customs duty rates on petroleum products have also significantly contributed in price determination.
The data compiled by the Federal Board of Revenue (FBR) relating to the duties and taxes collected at the import stage highlights heavy indirect taxation that has started hurting the consumers badly. The taxes that are paid on their domestic sales are over and above this collection.
In July, the FBR collected Rs62 billion in taxes at the import stage on petrol, natural gas, crude oil (a new tax), high speed diesel, bituminous coal, RBD palm oil, olein palm and furnace oil, according to FBR statistics.
The Rs62-billion collection was higher by 100% over Rs31 billion generated on these products in July last year, showed the data. One of the major differences was imposition of 17% sales tax on crude oil and increase in customs duty on import of petrol from 5% to 10%.
The Rs62-billion collection was equal to 29% of the total taxes collected at the import stage and 15% of the total Rs413 billion taxes that the FBR generated in July alone.
Overall, Pakistan Customs had collected Rs213 billion at the import stage under the heads of customs duty, sales tax, withholding tax and federal excise duty as compared to Rs143 billion collected during the first month of previous financial year, showing a growth of 47% as compared to previous financial year.
Pakistan’s imports are also poised to significantly increase due to various factors like expansion in economic activities and high food imports due to drop in their domestic production. The central bank projected $61 billion in imports in the current fiscal year, up by $7 billion or 13%, said the sources.
However, the commerce ministry is of the view that imports would surge to a record $70 billion in the current fiscal year, up by $16 billion or nearly 30%, said the sources.
In July, the FBR collected Rs12 billion taxes on petrol import – up by 50% or Rs4 billion – and despite a significant reduction in quantity of petrol imports, according to the FBR numbers. On average, the collection of taxes on imports of petrol was equal to 24% of the import value of July. There was massive surge in collection of customs duty on import of petrol, which increased from Rs670 million to Rs4.5 billion after the government doubled the customs duty rate to 10% in the budget.
The import of gas was the second biggest revenue spinner at the import stage. The FBR collected Rs10.2 billion taxes on gas import – higher by 168% or Rs6.4 billion over July last year. The quantity of gas import in July this year was far less than last year but value of import was more than double to Rs43 billion.
