Annual Report 2010 - Ministry of Finance and Planning

2 | FISCAL DEVELOPMENTValue Added Tax (VAT)The revenue from VAT on a net basisincreased by 28 percent in 2010. TheVAT revenue from domestic sectorincreased significantly reflectingthe recovery of economic activities,particularly the trade and servicessectors, while that of imports alsoincreased, particularly due to theincreased import of motor vehicles.During the year, while supportingthe local industries to flourish, thegovernment took steps to supportthe reconstruction and rebuilding ofconflict affected areas and to facilitatelarge infrastructure developmentprojects by way of granting exemptionfrom the payment of VAT.Rs. million250,000200,000150,000100,00050,0000Chart 2.3 > Performance of VAT: 2005 - 2010200520062007200820092010Table 2.2 > Revenue from Value Added TaxItem Amount (Rs. Mn) Growth (%)2005 2006 2007 2008 2009 2010 2009 2010Domestic 67,756 82,620 95,738 112,616 105,486 128,618 -6.3 15.1Imports 83,185 93,221 101,813 100,831 73,997 99,669 -26.6 47.1Gross Revenue 150,941 175,841 197,551 213,447 179,483 228,287 -15.9 27.2Refunds 12,281 11,174 9,957 9,801 7,973 8,724 -18.7 9.4Net Revenue 138,660 164,667 187,594 203,446 171,510 219,563 -15.8 28.0Net Revenue as a % of GDP 5.7 5.6 5.2 4.6 3.6 3.9Source: Department of Fiscal PolicyExcise TaxesTotal revenue collected from excisetaxes in 2010 was Rs. 129,864 millioncompared to Rs. 97,604 million in2009, which is a 33 percent increase.The main sources relating to generationof excise tax income are liquor,cigarettes & tobacco, petroleum andmotor vehicles.Hard liquor production recorded a 25percent increase over 2009 and helpedto realize Rs. 31,490 million as exciseduties. Similarly, excise tax revenueon soft liquor also increased by 40percent to Rs. 4,926 million comparedto 2009. The increase of sales in theItem Rs. Mn Growth (%)2006 2007 2008 2009 2010(Pro.)2009 2010Liquor 20,662 23,723 27,434 28,525 36,654 4.0 28.5Cigarettes/Tobacco30,099 31,447 37,288 37,601 40,675 0.8 8.2Motor Vehicles 20,731 17,415 11,067 3,192 21,199 -71.2 564.3Petroleum &other21,353 24,099 25,181 28,286 31,336 12.3 10.8Total 92,845 96,684 100,970 97,604 129,864 -3.3 33.0Source: Department of ExciseTable 2.3 > Excise Tax Performance150