LTU Karachi collects Rs259bln, exceeds July-September target

KARACHI: The Large Taxpayers Unit (LTU) Karachi has collected revenue worth Rs259 billion during the first quarter (July– September) of the current fiscal year owing to better revenue receipts of sales tax on petroleum products, official sources said on Monday.

“The unit, which is a major revenue collection arm at national level, surpassed the target of Rs257 billion set by the Federal Board of Revenue (FBR) for the period under review,” an official told The News. 

The overall revenue collection grew by 28 percent compared with Rs202 billion collected in the corresponding quarter of the last fiscal year.

The official asserted that the revenue measures taken by the government in the budget 2017-18 had a positive impact on revenue collection. 

“Several provisions were amended in the latest budget to boost revenue such as taxation on dividend, rationalisation of rates on interest income, changes in capital gain tax regime, withdrawal of tax credit to manufacturers etc.” 

The official, however, said that the major revenue spinner for the unit was sales tax (domestic) on supply of petroleum products. 

The sales tax collection from the supply of petroleum products increased significantly by 44 percent, while the tax collected by the unit from domestic supply of petroleum products increased to 46 billion during July–September 2017 compared to Rs32 billion in the same period last year. 

The breakup of Inland Revenue collection revealed that in the first quarter, the total sales tax collection posted a growth of 30 percent to Rs208 billion compared to Rs160 billion in a year earlier.  Similarly, the collection of income tax and federal excise duty increased to Rs37 billion and Rs13 billion compared to Rs28 billion and Rs12 billion, collected last year, respectively. 

The official further said the revenue collection from banking system remained stagnant due to flat growth in profits of banks during the period. “The FBR was evolving a strategy to examine the financial results of the banking sector in order to match the profits and paid taxes by the banks,” the official added. 

It must be noted that during the period under review payment of refunds also increased five times. The unit paid sales tax refunds amounting Rs6 billion during the first quarter of current fiscal year as against Rs1 billion paid in the same period of the last year.  Moreover, the month-wise data unveiled that the LTU Karachi also surpassed the September 2017 collection target of Rs103 billion by collecting Rs105 billion.

The collection in the month increased by 26.5 percent compared to Rs83 billion collected in September 2016.  At the national level the provisional figures showed the FBR collected Rs760 billion during the period against the target of Rs782 billion.

The FBR sources said that after reconciliation of collection data the figures would reach Rs782 billion, which is the set collection target. “The revenue has been assigned Rs4,012 billion revenue collection target for fiscal year 2017-18,” one of the sources added.