Wednesday, October 20, 2021

Tax collection on goods, services up 15pc in first half

KARACHI: The collection of withholding tax (WHT) on sale of goods and services increased 15 percent in the first half of this fiscal year, owing to improved economic activities after a letup in the first wave of coronavirus in that period, data showed on Tuesday.

The collection of withholding income tax increased to Rs17.77 billion during the first half of the current fiscal year as compared to Rs15.51 billion in the same half of the last fiscal year, according to official data of Large Taxpayers Office (LTO) Karachi.

Sources at the tax office said the second wave of the COVID-19 pandemic was still a major threat to economic growth prospects, adding, though the government had not imposed strict lockdown, services providers were facing challenges due to compliance of anti-virus SOPs (standard operating procedures).

According to the statistics the collection of WHT on goods grew 27 percent to Rs7.45 billion during July– December 2020/2021 as compared with Rs5.84 billion in the corresponding period of the last fiscal year.

The sources attributed this growth to an increase in manufacturing and trading activities following easing coronavirus restrictions.

According to Pakistan Bureau of Statistics (PBS), Large Scale Manufacturing (LSM) for the July–November period increased 7.41 percent.

On the other hand, the collection on the same declined 7 percent to Rs7.64 billion during the first half of the current fiscal year as compared with Rs8.17 billion in the corresponding half of the last fiscal year.

Sources said this decrease was due to enforcement of coronavirus pandemic related SOPs and allowing people to work from home.

The collection of tax on payment on contracts however jumped 54 percent to Rs1.54 billion during the period under review as compared to Rs1 billion in the same period last fiscal year, mainly due to an increase in release of funds under public sector development programs (PSDP).

The collection of WHT on sale of goods and services during the month of December 2020 grew 45 percent to Rs3.62 billion as compared to Rs2.5 billion in the same month of the last year.

The sources said that the revenue collection outlook during the remaining months of the current fiscal year remained uncertain.

In a meeting held on Monday at LTO Karachi, the tax managers pleaded with the FBR chairman that collection target of Rs4,963 billion was too difficult to meet and should be revised down.

Source: The News

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