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September 17, 2019

RTO-II’s revenue collection jumps 42pc in July-August

Business

September 17, 2019

KARACHI: Regional Tax Office (RTO) –II Karachi has posted an unprecedented 42 percent growth in its revenue collection to around Rs19 billion during the first two months of the current fiscal year, sources said on Monday.

The tax office collected Rs13.2 billion in the July-August period of the last fiscal year. The regional tax office surpassed the revenue collection target of Rs18.78 billion that was assigned by the Federal Board of Revenue (FBR) for the first two months.

The RTO-II officials attributed the sharp rise in revenue collection to broadening of tax base efforts during the period and change in tax rates introduced in the budget 2019/20. The tax office launched aggressive drive and forced several tax dodgers to bring them into the tax net.

The sources said the office conducted analysis and obtained information of withholding tax deduction from withholding agents to net individuals who have high volume of transactions in real estate, motor vehicles, banking, and education.

The drive is going on and the RTO-II Karachi managed to bring large number of individuals into the tax net in addition to collect huge amount as tax money.

The breakup of collection by RTO-II showed that it posted 44 percent growth in income tax collection in the July-August period.

The income tax collection grew to Rs15.57 billion during July-August of the current fiscal year compared with Rs12.18 billion in the corresponding period of the last fiscal year.

However, the collection of sales tax registered 20 percent growth. Sales tax collection increased to Rs1.23 billion in the first two months as against the collection of Rs1.02 billion in the same period a year earlier.

The FBR faced a huge shortfall during the period under review as its provisional collection was Rs574 billion compared with the target of around Rs644 billion for the first two months of the current fiscal year.

The FBR was assigned Rs5.550 trillion as revenue collection target for the current fiscal year. In order to achieve the target, the FBR needs 45 percent growth from last year’s collection as the total tax revenue amounted to Rs3.829 trillion in the fiscal year 2018/19.

Tax authorities issued notices to education centres, doctors, auto dealers, restaurants, and bakeries to bring businesses into the tax net. There are only 2.493 million filers of tax returns in the country with over 200 million population.

The first test of the Federal Board of Revenue is to achieve collection of Rs1.072 trillion for the first quarter (July-September) period under an International Monetary Fund’s (IMF) condition. Pakistan agreed to $6 billion IMF loan program in July.

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