KARACHI: The collection of income tax from salaried persons registered 68 percent growth during July – March 2019/2020 due to upward revision in tax rates on various salary slabs, State Bank of Pakistan (SBP) reported in its Third Quarterly Report on Pakistan Economy issued on Thursday.
The collection under this head increased to Rs89.7 billion during July – March 2019/2020 as compared with Rs53.5 billion in the corresponding period of the preceding fiscal year.
The SBP attributed the rise in tax collection from salary to upward revision in tax rates on various salary slabs.
The central bank said that the Federal Board of Revenue (FBR) collected Rs41.3 billion as advance tax on telephone/mobile phones during July – March 2019/2020 showing around 7-time higher than the collection of Rs5.3 billion in the corresponding period of the preceding fiscal year.
The advance tax collection was remained suspended in 2018/2019 which resulted in nominal collection in the same year. However, after the resumption of collection granted by the court resulted in phenomenal growth.
The advance tax collection from imports registered negative growth of 8 percent to Rs155 billion during July – March 2019/2020 as compared with Rs168.2 billion in the corresponding period of the preceding fiscal year.
The decline in revenue collection was mainly due to slowdown in the economy in the start of the fiscal year 2019/2020 which resulted in fall in country’s import bill during the period. However, this impact was further worsened following the coronavirus pandemic.
The FBR also witnessed 52.5 percent decline in advance tax collection from cash withdrawal during the period under review. The revenue authority collected Rs12.7 billion during first nine months of the fiscal year 2019/2020 as compared with Rs26.8 billion in the corresponding period of the preceding fiscal year.
The SBP report stated that with the abolishment of advance tax on banking transaction for filers in Finance Supplementary (Second Amendment) Bill, 2019, the collection from cash withdrawal declined by 52.5 percent during Jul-Mar FY20 as compared to a rise of 7.8 percent in the review period.
Collection from contracts grew by 5.5 percent during Jul-Mar FY20 in contrast to a decline of 15.3 percent in the corresponding period last year.
This is largely due to higher PSDP releases during the period under review.