ISLAMABAD, July 17: The collection of general sales tax (GST) has declined from electricity, natural gas, cement and motor cars during the year 2006-07 over the same period of last year.

Official figures released here on Tuesday at the first quarterly conference of collectors of sales tax and federal excise, showed that the GST collection declined by 3 per cent from electricity, 6 per cent natural gas, 8 per cent cement, and 29 per cent motor cars during the year under review over the last year.

With this decline, the overall collection of GST remained short of the target during the year under review.The sectors, which have shown positive growth in the sales tax collection in 2006-07 were telecom (35.8 per cent), POL (5.8 per cent), sugar (26.1 per cent), cigarettes (20.5 per cent), services (20 per cent), beverages 19 per cent) etc.

Chairman Federal Board of Revenue (FBR) Abdullah Yousuf told the collectors that reliance on few major sectors like telecom, POL etc were not advisable and likely to weaken revenue position in future and enhance the organisation’s vulnerability.

“We, therefore, have to carefully analyse the tax potential exists in different sectors of the economy and their contribution in revenue. We must ensure that all due taxes are collected,” the chairman remarked.

He called upon the tax collectors to make concerted efforts to broaden tax base for which enormous potential exists in various sectors of the country.

“Currently, we have a very narrow tax base. Unless we expand this base, we may not be able to enhance our tax-to-GDP ratio, which at present is not at the desired level,” he added.

Mr Yousuf reminded the collectors that the present level of tax-to-GDP ratio was certainly not acceptable to the government. “We have to raise it from present level of 10.5 per cent to 15.5 per cent by the year 2017, as projected in 10-Year taxation plan.

About disposal of refunds claims, the conference was told that an amount of Rs9.1bn refunds had been withheld in 8,757 refund claims till June 30, 2007.

Major sectors, which have recorded significant growth in federal excise collection were cigarettes (17 per cent), cement (22.6 per cent), POL products (24.7pc) and beverages (24.5 per cent).

The chairman, however, directed the Audit Wing to expedite the settlement of both external and internal audit observations. He said taxpayers’ audit should be based on automated, un-biased and discretion-free method.