LTO Karachi posts 10pc growth in revenue collection in July-October

KARACHI: Large Taxpayers Office (LTO) Karachi saw revenue collection increase 10 percent year-on-year to Rs444 billion during the first four months of the current fiscal year, as economic activities rebounded after coronavirus lockdown, official data showed on Monday.

The LTO Karachi, the largest revenue collection arm of the Federal Board of Revenue (FBR) with more than 33 percent contribution, collected Rs402 billion in the same period of the last fiscal year. The LTO Karachi has jurisdiction of large corporate entities operating in the country.

The FBR collected Rs1.34 trillion during the first four months of the current fiscal year compared with Rs1.29 trillion in the corresponding period of the last year, showing a growth of four percent.

The breakup of revenue collection by the LTO Karachi revealed that the tax office registered 23 percent growth in income tax collection. The collection of income tax increased to Rs75.3 billion during July-October 2020 compared with Rs61.4 billion in the corresponding period of the last fiscal year. “The resumption of economic activities after ease of lockdown in June helped the companies return to revenue generation,” an official said.

The official said the audit exercise launched by the tax office also helped to generate additional income tax revenue during the period. The LTO Karachi collected Rs3.45 billion through audit exercise during the first four months of the current fiscal year compared with Rs534 million in the same period of the last fiscal year.

The collection of withholding income tax increased to Rs29.9 billion during the period under review compared with Rs26.8 billion in the same period of the last fiscal year. The accelerated economic activities during the first four months of the current fiscal year also helped the LTO Karachi post 11 percent growth in sales tax collection.

The collection of sales tax amounted to Rs368.3 billion during July-October compared with Rs333 billion in the same period of the last fiscal year. The sales tax collection on domestic resources increased 42 percent to Rs97.3 billion compared with Rs68.5 billion in the same period of the last fiscal year. However, collection of sales tax at the import stage posted only four percent growth to Rs279 billion as against Rs267.5 billion.

The official said the sales tax collection was high despite issuance of significant refunds. The tax office issued sales tax refunds worth Rs8 billion during the first four months of the current fiscal year compared with Rs2.72 billion, showing 195 percent increase.

However, the collection of federal excise duty by the LTO Karachi witnessed 23 percent decline to Rs15.6 billion during the period under review compared with Rs20.2 billion in the corresponding period of the last fiscal year.