LTO Karachi tops Rs1 trillion in half-year tax collection

KARACHI: The Large Taxpayers Office (LTO) Karachi, a unit of the Federal Board of Revenue, collected more than Rs1 trillion in taxes in the first half of the current fiscal year, a record high for the office, its commissioner said on Wednesday.

“The LTO Karachi exceeded its six-months target of tax collection during the period from July-December this fiscal," Girdhari Mal, commissioner Inland Revenue told a news conference in Karachi.

Mal said LTO Karachi crossed the mark of Rs1 trillion tax collection in six months by collecting Rs1.221 billion, which is 27 percent higher than the corresponding period of last year.

"The LTO Karachi has also exceeded its monthly target for December 2023 by collecting Rs320 billion against the target of Rs316 billion for the month."

The commissioner said it was also the first time that LTO crossed Rs300 billion collection in a month.

"The remarkable performance of tax collection was achieved despite nominal growth of imports at 2.5 percent, however substantial growth of 47 percent was achieved in domestic taxes."

The commissioner pointed out that the LTO Karachi improved its tax collection ration from direct taxes and non-withholding taxes substantially. Besides, the LTO Karachi also improved demand collection by 55 percent and above tax collection by 67 percent against the last year, he added.

Mal said the accomplishment of collecting over Rs1 trillion in six months underscores the robust tax collection system in place, contributing significantly to the national exchequer. "The achievement also reflects positively on the economic resilience and fiscal responsibility demonstrated by Pakistan’s tax authorities," he added.

About the sector-wise contribution in the tax collection of LTO, Karachi, commissioner Mal said that cotton ginners, the banking sector, food and beverages and tiles sector contributed positively in the overall tax collection of the office, whereas auto sector contributed negatively because slump in the sales of vehicles. Mal said 82 taxpayers are in the system through point of sales (POS) and POS machines are installed in 1,064 outlets of these taxpaying companies. "Rs4.4 billion was collected through POS, which showed growth of 29 percent."

The commissioner said the success story of LTO Karachi is a testament to the dedication and strategic efforts of the tax officials and the efficiency of the tax collection framework. "As the global economic landscape evolves, such achievements play a pivotal role in fortifying the financial stability of the country."

To a query about the tax recovery of Rs4.5 billion from one taxpayer by LTO Karachi through creation of tax demand, Mal refused to disclose the name of the company as section 216 of Income Tax Ordinance didn’t allow the disclose the identity of taxpayers.