Major revenue spinners to yield Rs 34.556 billion
ISLAMABAD (June 15 2007): Big revenue spinners in the new financial year would be one per cent special surcharge on imports (Rs 13.24 billion); revision of tariff on automobile industry (Rs 1.3 billion); 20 percent sales tax on specified raw materials (Rs 9.1 billion); rationalisation of excise duty on international air travel (Rs 6 billion); increase in excise duty on cigarettes (Rs 4.5 billion); and extension of scope of excise duty on non-fund banking services would generate one billion rupees.
Official sources told Business Recorder that the federal government would generate additional revenue of Rs 13.24 billion from levy of one per cent surcharge on imports, which would be separately collected as an additional customs duty.
Sources said amnesty scheme to waive of fine/penalties and surcharges on payment of principal amount is expected to give Rs 700 million to the CBR, while the effect of waiver of capping export of goods from Export Processing Zones (EPZ) to tariff areas would be Rs 5 million.
They said the proposal to levy 20 percent sales tax on specified raw material of iron, steel, plastic and paper industries would contribute Rs 9.1 billion while increase/rationalisation of excise duty rates on cigarettes would generate Rs 4.5 billion.
The revenue effect of extension of the scope of non-fund banking services would be Rs 1 billion. However, revenue loss due to revision of tariff structure on automotive sector would be Rs 1.3 billion. It would cover three areas ie merger of CVT in customs duty; downward revision on old cars imports from 5 to 3 years and five-year plan for automobile sector. Whereas withdrawal of capital value tax (CVT) on cars and power of attorney executed between first relations would cost Rs 1.5 billion to the government.
The proposal to rationalise levy of excise duty on international air travel would contribute Rs 6 billion, followed by Rs 400 million from withdrawal of sales tax zero rating on chemicals of multiple usage and Rs 300 million from the proposal to withdraw input tax adjustment on supply of electricity/ gas to residential colonies of registered persons.
The CBR would collect Rs 1 billion revenue from sales tax on Compressed Natural Gas (CNG) station from gas distribution companies while the amount of revenue would be Rs 2 billion from introduction of withholding agent system in sales tax, the sources maintained.
However, withdrawal of exemption provided to mutual fund on CFS interest income would contribute Rs 350 million to the national kitty, besides, Rs 700 million from presumptive tax regime applied on CNG stations.
However, the proposals of withholding tax on electricity as minimum tax for non-corporate consumers and companies to pay advance tax in the first year would have nominal impact on revenue generation.
Sources said the aggregate revenue effect of all measures announced in the federal budget would generate Rs 44.425 billion from customs duty, sales tax, federal excise and income tax descriptions whereas revenue loss has been estimated at Rs 9.869 billion from tax exemptions and relief measures. The net revenue effect would be Rs 34.556 billion.
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