Income tax revenue rises 9.6% to Rs. 104 b in 1Q

Wednesday, 3 July 2019 00:00 - - {{hitsCtrl.values.hits}}

Latest data shows revenue from domestic consumption taxes unchanged at Rs. 193 b
VAT on domestic activities flat at Rs. 102 b but imports grow 3.6% to Rs. 59 b
NBT rises by 2.5% to Rs. 19 b, Customs duty by 6.9% to Rs. 31 b
Excise duty on imports drops 40.7% to Rs. 58 b as vehicles, alcohol and oil reduce

Government efforts to increase direct tax revenue saw income tax earnings increase significantly by 9.6% to Rs. 104 billion in the first quarter, compared to Rs. 95 billion in the same period of 2018, the latest mid-year fiscal report from the Finance Ministry said.

This rise was mainly due to the increase in revenue collection from corporate and non-corporate income taxes, Pay-As-You-Earn (PAYE) tax and the Economic Service Charge (ESC).

Revenue generated from domestic consumption-based taxes remained unchanged at Rs. 193 billion in the first four months of 2019 owing to the moderation of domestic economic activities.

Revenue generated from Value Added Tax (VAT) on domestic activities remained flat at Rs. 102 billion during the first four months of 2019.

“However, revenue collected from Nation Building Tax (NBT) on domestic activities increased slightly by 2.5% to Rs. 19 billion in the first four months of 2019, compared to Rs. 18 billion in the same period of 2018. Similarly, revenue from the excise duty on domestic economic activities fell by 1% to Rs. 72 billion in the first four months of 2019, compared to Rs. 73 billion recorded in the same period of 2018,” the report said.

Revenue collected from import-based taxes declined significantly by 12.7% to Rs. 234 billion in the first months of 2019, compared to Rs. 268 billion in the same period of 2018.

Revenue collected from Customs Import Duty (CID) increased by 6.9% to Rs. 31 billion in the first four months of 2019, compared to Rs. 29 billion in the same period of 2018.

Revenue collected from VAT and NBT on import related activities increased moderately by 3.6% to Rs. 59 billion and 3.9% to Rs. 7 billion, respectively. Revenue collected from Ports and Airports Development Levy (PAL) increased slightly by 2.8% to Rs. 37 billion in the first four months of 2019.

Revenue from Special Commodity Levy (SCL) increased by 3.6% to Rs. 25 billion in the first four months of 2019 from Rs. 24 billion in the same period of 2018.

Excise duty on import-related activities fell significantly by 40.7% to Rs. 58 billion in the first four months of 2019, compared to Rs. 98 billion in the same period of 2018 due to the decline in revenue from motor vehicles, petroleum products, cigarettes and tobacco and liquor products.

Meanwhile, revenue from CESS Levy declined slightly by 2.4% to Rs. 16.8 billion in the first four months of 2019 from Rs. 17.2 billion in the same period of 2018 due to the removal of CESS under the phasing out of the Para-tariff Program.