IMF team visits LTU Karachi

KARACHI: The International Monetary Fund (IMF) held orientation meeting with large taxpayers unit (LTU) Karachi ahead of quarterly review of the loan programme, sources said on Wednesday.

The sources in LTU Karachi said that two-member team comprising IMF Resident Representative Teresa Daban Sanchez and Dr Zafar Hayat, Senior Economist at the IMF visited the unit a day earlier.

They said the purpose of the visit was to assess capacity of tax contribution by large taxpayers in achieving this year’s revenue collection target of Rs5,550 billion.

The focus of the meeting was policy and enforcement by the tax department.

On the policy side, the Fund was assessing the changes brought through Finance Act, 2019 and impact on revenue collection from the documented sector. While on other side, the Fund was focusing the enforcement of tax laws on the undocumented sector, the sources added.

The IMF team also measured the exercise of broadening the tax base undertaken by the FBR. Sources said the LTU Karachi had made a presentation on the revenue collection and about the high volume taxpayers.

It is pertinent to note that the LTU Karachi has jurisdiction over high net-worth individuals, which include chief executives, chief financial officers, and directors of companies.

Under the IMF $6 billion Extended Fund Facility agreement, FBR is required to provide various types of information to the Fund on monthly and quarterly basis.

Earlier, the team also visited LTU Lahore and Custom House Karachi.

The LTUs are required to provide quarterly data to the IMF on the number of taxpayers and amount of taxes managed.

Sources said customs was also required to provide quarterly data to the Fund, including total value of recorded imports; total value of duty paid recorded imports; number

of total transactions involving recorded imports; and

number of total transactions involving non-duty free recorded imports.