LTU Karachi collects Rs510 billion in July-November

KARACHI: The main tax department of the Federal Board of Revenue (FBR) posted 16 percent growth in revenue collection to Rs510 billion in the first five months of the current fiscal year of 2019/20 as the government revoked zero-rated sales tax facility and other concessions, sources said on Tuesday.

Large Taxpayers Unit (LTU) Karachi collected Rs439 billion in the corresponding period of the last fiscal year. The FBR sources attributed the growth in revenue collection to the budgetary measures taken in the budget for the fiscal year of 2019/20.

The government eliminated sales tax zero-rated regime for five export-oriented sectors, imposed 100 percent withholding tax on individuals not appearing on active taxpayers list (ATL) and slapped uniform sales tax rates on petroleum products.

The collection of income tax posted seven percent growth to Rs62 billion during July- November 2019/20. That compared with Rs58 billion generated as income tax in the corresponding period of the last fiscal year.

LTU Karachi released Rs14 billion in income tax refunds during the first five months. Out of total income tax collection, the withholding tax collection amounted to Rs33 billion during the period under review. Withholding tax collection was recorded at Rs30 billion in the same period of the last fiscal year.

The sources said growth in withholding tax collection from transactions that were not subject to conditions of ATL witnessed decline during the period. The LTU Karachi’s data showed that non-cash banking transactions and advance tax on air tickets, which are not subject to ATL condition, witnessed decline in collection.

The collection of sales tax posted 18 percent growth to Rs420 billion during the period under review. The figure was Rs356 billion in the corresponding period of the last fiscal year.

The sources attributed the 18 percent growth to elimination of zero-rated sales tax regime during the current fiscal year. They said the sectors, which were subject to zero-rated facility, are now paying 17 percent sales tax.

The collection of sales tax on import stage witnessed 19 percent growth to Rs333 billion during the first five months of the current fiscal year. That compared with Rs279 billion in the corresponding period of the last fiscal year.

Sales tax collection on domestic sources posted 15 percent growth to Rs89.6 billion during the period under review. Previously, the sales tax collection was Rs78 billion. LTU Karachi settled three billion rupees as sales tax refunds in the July-November period.