‘FBR underestimates tax contribution of Karachi’

September 23, 2020

KARACHI: Karachi Chamber of Commerce and Industry on Tuesday contested the tax collection data related to the city presented by the Federal Board of Revenue , raising questions over the discrepancy...

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KARACHI: Karachi Chamber of Commerce and Industry (KCCI) on Tuesday contested the tax collection data related to the city presented by the Federal Board of Revenue (FBR), raising questions over the discrepancy in statistics.

KCCI President Shahab Ahmed said the FBR reported Karachi’s income tax collection at Rs209 billion in 2018, while district-wise it was shown that Karachi contributed Rs186.3 billion, including central (Rs9.06 billion), east (Rs34.1 billion), south (Rs114.2 billion), and west (Rs28.9 billion).

“This clearly indicates a discrepancy of Rs23 billion,” Ahmed said in a statement. “It is unclear whether Karachi’s share was Rs209 billion in total or the district-wise collection was to be added to it. This mismatch in income tax collection figures has raised serious doubts among business circles who are terming it as yet another conspiracy against Karachi.”

KCCI president said the FBR’s claims were based on partial information creating a wrong perception about the income tax collection from different cities, while some important information was skipped by which a reader could have verified the data.

Ahmed said the province-wise share was only revealed in percentage terms in the tax directory and the total value was not disclosed anywhere in the document to authenticate the claims.

“Even while disclosing the income tax collection from major markets, many important markets including the DHA’s gold and Khadda markets and other important markets of Malir, Korangi, Banaras and Bahria Town were not included in the data, which gave a wrong impression that the tax collection from Karachi is low in comparison of other cities,” he said.

KCCI president further said the selected market data of the cities constituted just 25.7 percent or 413,859 filers out of 1.6 million non-salaried individuals and association of persons, “making it an incorrect estimate of the size and share”.

“The data analysis given by FBR is just a number game and it is an attempt to undermine the share of Karachi,” he said.

KCCI president said the tax directory made income tax collection from Karachi very close to Rs204 billion from Islamabad, which is impossible keeping in view the size, population and the immense industrial and economic activities in the city.

“We totally disagree with FBR’s analysis as Karachi is a port city where most of the head offices of multinational companies, banks, development finance institutions and insurance companies are located, while the highest number of institutions, hundreds of commercial markets, shopping malls and plazas are also present in this city, making it the country’s leading industrial and commercial hub,” he said. “How could Islamabad with a population of just 1 million and negligible industrial activity compete with Karachi which holds a whopping population of around 20 million that makes it one of the largest cities of the world with seven industrial zones hosting thousands of industrial units?”

Ahmed said such attempts were made in the past which were widely protested and completely rejected by the KCCI. “It has been proven from time to time that Karachi contributes the highest revenue of around 65 percent revenue to the national exchequer which has also been admitted by Federal Minister Asad Umer and many others.”

KCCI president requested the government to look into this serious matter and grill the FBR for releasing such an irresponsible analysis, direct the revenue collection authority to immediately withdraw the ‘fabricated’ analysis and issue a revised version which must carry comprehensive and accurate fact and figures about Karachi.

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