LTU Karachi collects Rs218 billion taxes in July-September

KARACHI: Large Taxpayers Unit (LTU) Karachi, the largest revenue collecting arm of the Federal Board of Revenue (FBR), collected Rs218 billion in the first quarter of the current fiscal year of 2015/16, up 11 percent over the same period a year ago, official data showed on Tuesday.
LTU Karachi collected Rs197.3 billion in the July-September period of the 2014/15 fiscal year.
During the first quarter, the revenue collection of the LTU Karachi accounted for 36 percent of a total national revenue collection, which was Rs600 billion.
This is in line with the FBR’s tax revenue growth, which was up 11 percent in July-September of 2015/16.
LTU Karachi posted more than 100 percent growth in the collection of direct taxes. The net collection of direct taxes stood at Rs39.52 billion as compared to Rs19.73 billion in the corresponding period of the preceding fiscal year.
The unit issued refunds of income tax to the tune of Rs5.88 billion during the period under review.
The unit collected Rs18.67 billion as advance tax, showing 37 percent growth when compared with the previous collection of Rs13.64 billion. Under the head of capital gains tax, the unit collected Rs2.62 billion as against Rs1.76 billion.
Major chunk in the direct taxes came from withholding tax, which posted 54 percent growth to Rs13.1 billion during July-September 2015/16 as against Rs8.5 billion earlier.
The significant growth can be attributed to changes brought in the federal budget 2015/16 regarding withholding tax rates for filers and non-filers.
The LTU Karachi collected Rs3.35 billion under the Section 236P of Income Tax Ordinance, 2001, which was introduced in the federal budget 2015/16 and through which the government imposed 0.6 percent withholding tax on non-cash banking transaction of over Rs50,000/day made by non-filers. The rate was cut to 0.3 percent after the businessmen’s protest. The rate is effective till October 31, 2015.
The unit also collected Rs5.5 billion as withholding income tax imposed on export proceeds.
This collection grew 27 percent over Rs4.34 billion in the first quarter of last fiscal year.
A tax official said the aggressive audit exercise by officials of LTU Karachi resulted in 581 percent surge in collection on the current demand to Rs3.8 billion during July-September 2015 as against Rs556.4 million in the corresponding period of the last fiscal year.
The combined collection of sales tax under imports and domestic supplies was recorded at one percent due to fall in petroleum prices during the period.
Further, the unit issued refunds worth Rs7.63 billion during the period under review as against Rs2 billion in the comparative period of the last fiscal year.
The domestic sales tax amounted Rs44.96 billion and sales tax on imports was at Rs130 billion in the period under review. The federal excise duty collection was up 22 percent to Rs11 billion from Rs9 billion.