Karachi, November 28, 2023 – The Federal Board of Revenue (FBR) has reported a 7.8 percent drop in customs duty collection during fiscal year 2022-23, attributing the decline to challenges arising from falling imports.
The recently released yearbook highlighted the impact of reduced imports on customs revenue, resulting in a negative growth rate compared to the previous fiscal year.
In FY2022-23, customs duty faced challenges as imports declined, leading to a negative growth of (7.8) percent. The net collection for the fiscal year stood at approximately Rs. 932 billion, down from around Rs. 1,011 billion in the preceding fiscal year. The customs duty’s contribution to the total FBR revenues also experienced a decrease, falling from 16.4 percent in the previous fiscal year to 13 percent in the current fiscal year.
Among the top 10 customs duty-contributing sectors, four sectors witnessed negative growth. The collection from Vehicles (Non-Railway) demonstrated a substantial negative growth of (51.0) percent, followed by Electrical Machinery with (33.8) percent negative growth, and Machinery & Mechanical Appliances with (26.0) percent negative growth. These negative growth rates led to a reduction in their collective share in overall customs duty collection from 33.7 percent in the previous fiscal year to 22.4 percent in the current fiscal year.
Major Revenue Spinners of Customs Duties:
1. POL Products (27): Collection – Rs. 279,842 million, Share – 28.9%, Growth – 7.5%
2. Vehicles (Non-Railway) (87): Collection – Rs. 88,989 million, Share – 9.2%, Growth – (-51.0)%
3. Iron & Steel (72): Collection – Rs. 53,740 million, Share – 5.5%, Growth – (-17.3)%
4. Edible Oil (15): Collection – Rs. 48,262 million, Share – 5.0%, Growth – 22.8%
5. Electrical Machinery (85): Collection – Rs. 37,463 million, Share – 3.9%, Growth – (-33.8)%
6. Machinery & Mechanical Appliances (84): Collection – Rs. 37,157 million, Share – 3.8%, Growth – (-26.0)%
7. Plastic Resins etc. (39): Collection – Rs. 35,631 million, Share – 3.7%, Growth – 7.1%
8. Tea & Coffee (09): Collection – Rs. 22,042 million, Share – 2.3%, Growth – 13.9%
9. Paper & Paperboards (48): Collection – Rs. 20,763 million, Share – 2.1%, Growth – 11.3%
10. Articles of iron or steel (73): Collection – Rs. 15,696 million, Share – 1.6%, Growth – 9.4%
Subtotal (Top 10): Collection – Rs. 639,585 million, Share – 66.0%, Growth – (-13.4%) Others: Collection – Rs. 329,384 million, Share – 34.0%, Growth – 6.7% Gross: Collection – Rs. 968,969 million, Growth – (-7.5%) Refund/Rebate: Rs. 37,026 million, Growth – 2.0% Net: Collection – Rs. 931,943 million, Growth – (-7.8%)
The customs duty collection is directly influenced by dutiable imports. The decline in dutiable imports by (18.0) percent contributed to the (7.8) percent drop in customs duty. The variations in the net effect are attributed to differences in the quantities imported for various products, each having different rates of customs duty. The decline underscores the importance of monitoring import trends and adopting strategies to maintain a balance in customs revenue.
