Record tax revenue increase in first 4 months

Income tax revenue has increased by 14.2 percent to record Rs. 62,225 million during the first four months of 2013 compared to Rs . 54,485 million generated during the same period of 2012.

The notable increase of revenue from Pay As You Earn (PAYE) tax was by 43.5 percent and tax on interest by 51.2 percent contributed to the positive growth of income tax revenue, Finance Ministry data has revealed. Revenue from PAYE tax increased to Rs.6,981 million during the first four months of 2013 compared to Rs. 4,864 million generated during the same period of 2012 due to high wages, increased employment in high earning categories in sectors such as tourism, construction, IT and professional services, and improved compliance and expanded based with the inclusion of public sector employees following the 2011 tax reforms.

Tax revenue from interest income increased significantly to Rs. 33,788 million during the first four months of 2013 due to the increase in deposit base and higher interest rates and the issuance of Treasury Bonds and Treasury Bills during this period.

The revenue from ESC declined by 70.0 percent to Rs.3,065 million during the period mainly reflecting the impact of the increase of ESC threshold to Rs.50 million per quarter and removing the ESC liability on the turnover of any business of which the profits are subject to income tax and the moratorium on the extension of tax holiday.

However, sectors like export and import, manufacturing, constructions contributed positively to the revenue from ESC and remaining tax holidays companies. Revenue from Corporate and Non Corporate income tax increased by 7.9 percent to Rs.18,390 million during the January-April period of 2013 compared to the same period in 2012.

The banking, financial and insurance, food and beverages, import and export trade and manufacturing sectors contributed this growth despite the number of new exemptions and concessions granted by the 2013 budget.