August 02, 2007	Thursday	Rajab 17, 1428

ISLAMABAD, Aug 1: The Federal Board of Revenue (FBR) has raised more than 40 per cent sales tax just from 12 products during the fiscal year 2006-07 indicating a poor enforcement of the value-added tax in the country.

This heavy reliance on few commodities has resulted into a narrow base of the general sales tax (GST). Last year, the contribution of these 12 items was around 38 per cent in the total sales tax collection. The revenue spinners include - POL products, telephone and related telecom services, electrical energy, iron and steel products, natural gas, and cotton yarn.

Though in its efforts to widen the sales tax net in the country, the FBR is focusing on raising the number of registered sales taxpayers, who currently stands at 1, 24,900. This number is far lower than what it should be, given the size of the market and the economy.

Analysts said thousands of businessmen and professionals do not fully document their income with the result that they pay a fraction of what is due. The part of the problem is that the tax officials are involved in this practice and support the system in place as this offers those opportunities of corruption.

Official figures available with Dawn showed that of the total GST collection of Rs309.5 billion during the year 2006-07, around Rs125.2 billion were collected from these 12 products. The remaining amount of sales tax was realised from all other products, which showed a narrow tax base.

The product-wise collection showed that the sales tax collection rose by 35.8 per cent from telecom to Rs36.5 billion as against Rs26.8 billion; 5.8 per cent from POL products to Rs27.8 billion as against Rs26.2 billion; 26.1 per cent from sugar to Rs11 billion as against Rs8.7 billion and 20.5 per cent from cigarettes to RS6.9 billion as against Rs5.7 billion.

The GST collection rose by 20 per cent from services to Rs4.9 billion as against Rs4.1 billion, 15 per cent from beverages to Rs3 billion as against Rs2.6 billion and 19 per cent from ice cream to Rs2.2 billion as against Rs1.9 billion.

However, among these major revenue spinners the revenue collection recorded a negative growth during the outgoing fiscal year 2006-07.

The GST declined by 3 per cent on electricity during the year and stood at Rs12.9 billion as against Rs13.4 billion over the same period of the last year; collection from natural gas declined by 6 per cent to Rs12.4 billion as against Rs13.2 billion of last year.

Similarly collection of sales tax declined by 8 per cent from cement to Rs4.9 billion against Rs5.3 billion; 44 per cent on fertiliser to Rs0.9 billion as against Rs1.7 billion and motor cars 29 per cent to Rs1.8 billion as against Rs2.6 billion.