LTU Karachi’s revenue falls 41pc to Rs21bln in April

KARACHI: Large Taxpayers Unit (LTU) Karachi saw revenue collection from domestic sources sharply fall 41 percent year-on-year in April as the government-imposed lockdown amid the coronavirus outbreak worsened the economic woes, sources said on Monday.

The collection of domestic taxes by LTU Karachi declined from Rs35.71 billion in April 2019 to Rs21.03 billion in April 2020. The revenue breakup revealed that sales tax on locally-manufactured goods and supplies fell 32 percent year-on-year in April to Rs12.75 billion. That was compared with Rs18.7 billion in the corresponding period of the last fiscal year.

The sources said the sales tax collection from domestic sources was facing difficulties in pre-coronavirus due to slowdown in economy.

“The lockdown imposed to control coronavirus outbreak seriously affected the supply of locally manufactured goods,” a tax official said.

The first case of coronavirus was identified in late February in Pakistan. Sindh government imposed lockdown from March 23 to prevent the outbreak.

The lockdown halted all the manufacturing activities, wholesale and retail businesses running at shopping plazas and markets.

The sources said the major source of tax collection is sales of petroleum products, which witnessed decline both in prices and consumption.

Domestic sales of petroleum products plunged 35 percent to 1.07 million tons in April 2020. That was compared with 1.65 million tons in the same month of the last year. Besides, the reduction in prices of petroleum products during April after major cut in international oil prices also affected the sales tax collection.

The sources said the domestic sales of motor vehicle and home appliances were also major source of sales tax collection. However, due to lockdown the consumption of these goods also fell sharply.

The collection of direct taxes fell 33 percent to Rs7.23 billion in April. That was compared with Rs19.68 billion in the corresponding month of last year.

Overall collection of LTU Karachi fell 15 percent to Rs83 billion in April. That was compared with Rs98 billion collected in the same month last year.

Total collection of the unit, however, posted a 10 percent growth during first ten months (July-April) of 2019/20 to Rs1.053 trillion. That was compared with Rs960 billion in corresponding period of the last fiscal year.

The LTU Karachi issued sales tax refund worth Rs12.26 billion during the first ten months of the current fiscal year. Similarly, the unit issued Rs28.48 billion as income tax refund / adjustment in the same period of the last year.