KARACHI: The looming 63 percent shortfall in revenue collection from sugar sector has dashed the Large Taxpayers Unit (LTU) hopes for achieving annual budgetary target.
The LTU has collected Rs364 million from sugar sector in tax year 2013 as compared to Rs1.1 billion in tax year 2012, showing a decline of 63 percent.
The tax refunds in sugar sector in tax year 2013 were 150 percent of tax payments and records showed an alarming performance wherein tax refund claims were over Rs550 million against tax payables of over Rs350 million. The decline in revenue collection is attributed to, apart from other factors, the sale price of sugar which was as high as Rs88 per kg in November 2011 but later it decreased to Rs 50 per kg against the reported production cost of over Rs 60.
On the other hand, the sugar price had declined in tax year 2013 but most of the millers had consistently been declaring huge losses since tax year 2010, casting doubts on the sugar mills’ returns. The sustainability of these sugar mills declaring huge losses even during sugar price boom during 2011 raised questions about the declared version of these mills. Similarly tax turnover ratio of sugar sector was less than one percent during 2013 and the decline in it might have been witnessed due to facility availed under SRO 77(I)/2013.