RTO-II records 25pc growth in revenue to Rs105bln in FY2020

KARACHI: Regional Tax Office (RTO-II), a main arm of the Federal Board of Revenue (FBR), saw revenue collection remarkably grow 25 percent to Rs105 billion during the last fiscal year of 2019/20 as fast settlement of audit cases let the unit cross this collection level for the first time in history, an official statement said on Tuesday.

The RTO-II, having jurisdiction over non-corporate cases, collected Rs83.7 billion in the preceding fiscal year of 2018/19.

“The present Chief Commissioner Inland Revenue Nazir Ahmed Shoro, after taking over the charge of the RTO in May had drawn an effective plan to boost the collection which had started to go down the hell after March,” said the statement. “He (Shoro) focused on expeditious disposal of audit cases to accelerate the pace of collection during the remaining period of fiscal year of 2019/20 which along with motivation to officers and officials posted in the RTO resulted in the historical milestone of crossing Rs100 billion.”

RTO-II’s revenue collection also increased 40 percent year-on-year to Rs8.5 billion in June. The unit has jurisdiction over tax collection from Saddar, Jamshed, Liaquatabad, SITE, Lyari, Kemari, Baldia, and Orangi towns and Manora and Clifton cantonments.

The FBR in its ongoing broadening of tax base drive is approaching non-compliant taxpayers to bring them on the tax roll. Notices were issued to doctors, restaurants, bakers, and milk shops, asking them to file income tax returns and wealth statements.

The International Monetary Fund (IMF) said Pakistan is facing a problem of low level of revenue collection relative to GDP and to other regional economies.

Last year, IMF agreed to lend $6 billion in installments to help Pakistan overcome its balance of payments crisis. The loan program stalled in March and authorities are asked to implement a revenue generation strategy.

In FY2020, total FBR’s revenue collection increased partly 3.9 percent to Rs3.9 trillion due to slowdown in economic activities that were further affected by the coronavirus-associated lockdown.

The government imposed lockdown from late March across the country, and partially relaxed shutdown restrictions from the mid of May. The FBR faced worst hit in revenue collection during April and May when the revenue dropped 16 percent and 31 percent year-on-year, respectively.

In June, however, the downtrend started to reverse, but revenue was seen falling compared to the same month a year earlier. Revenue collection in June fell 12 percent year-on-year to Rs415 billion.

That compared with Rs472 billion a year earlier. Last year’s collection in June also included the one-time receipt of Rs50 billion from the tax amnesty scheme. The revised revenue target for outgoing June was Rs398 billion.