Dec 08, 2016

Import Tax revenue to fall short of the budget target

The Government will fall short of the 2017 revenue from import taxes by Rs.25 billion owing to the proposed reduction of cess on 100 items is implemented during the course of the year, Parliamentary Committee on Public Accounts warned.

The 2017 Budget anticipates growth in revenue from import duty and cess of 18% in 2017, yielding revenue of RS.225 billion. The concomitant growth in 2016 was 6%. The revenue growth assumption is predicated on import growth of 7% in 2017, whereas imports in the first 7 months of 2016 contracted by 3%. There are no substantive changes in import duty and the government plans to gradually phase out cess charges. The Finance Minister proposed to remove cess on 100 items, committee report said.

The anticipated growth in import duty and cess is reliant on improvements in administrative measures that enhance collection. The revenue from cess could be lower than this estimate if the proposed reduction of cess on 100 items is implemented during the course of the year. Based on the Analysis a reduction in the revenue estimate by at least 25 billion would be anticipated, report of the Committee on Public Accounts revealed.

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