KARACHI: Large Taxpayers Office (LTO) Karachi has collected Rs849 billion during first seven months of fiscal year 2020/2021, exceeding the target of Rs827.49 billion, despite releasing a hefty amount in refunds, officials said.
The tax office made an additional net collection of Rs21 billion during the period under review, while it posted 11 percent growth compared to Rs764.39 billion collected in July–January 2019/2020.
The LTO Karachi is the largest contributor in revenue collection at national level as it shares around 33 percent of total federal tax collection.
The officials at the LTO Karachi attributed the increase to efforts of Badaruddin Ahmed Qureshi, former Chief Commissioner, Inland Revenue, especially in the last month of his tenure. Ahmed retired on February 09, 2021.
The growth in revenue collection is important considering 89 percent in payment of refunds during the period under review. The tax office paid an amount of Rs59 billion as tax refunds during July–January 2020/2021 as compared to Rs31.13 billion in the same period of the last fiscal year.
The sources said the tax office made all-out efforts to ensure release of refund payments considering liquidity problems of the corporate sector because of coronavirus pandemic.
The breakup of revenue collection revealed that the tax office posted a 14 percent increase in collection of sales tax in both domestic and at import stage. The total sales tax collection increased to Rs683 billion during the first seven months of the current fiscal year as compared with Rs598 billion in the corresponding months of the last fiscal year.
The collection of sales tax (domestic) increased 33 percent to Rs176 billion, compared to Rs133 billion in the same period of the last fiscal year.
The tax officials said accelerated commercial and industrial activities after a drop in virus cases improved the supply side, which helped increase collection from domestic supplies significantly.
The sales tax collection at import stage also increased 12 percent to Rs528 billion during first seven months of the current fiscal year as compared to Rs473 billion in the same period last fiscal year.
The payment of sales tax refunds registered an unprecedented growth of percent as the LTO Karachi released Rs20 billion during the period, compared with Rs7.64 billion in the last fiscal year.
The net collection of direct taxes grew 6 percent to Rs134 billion. That compared with Rs126.53 billion in the corresponding months of the last fiscal.
The tax office released income tax refunds to the tune of Rs39 billion, 65 percent higher than Rs23.5 billion paid in the seven months of the last fiscal year.
