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April 14, 2021

LTO Karachi’s tax collection grows 60pc in March

Business

April 14, 2021

KARACHI: The Large Taxpayers Office (LTO) Karachi has posted a significant increase of 60 percent in revenue collection in March 2021 year-on-year basis despite 118 percent increase in issuance of refunds in the same period.

According to provisional figures made available, the tax office collected Rs158.55 billion during March 2021 as compared with Rs99 billion in the corresponding month of the last year.

This was despite the continuous adverse impact of the coronavirus pandemic on the economy that started in March last year. The revenue collection growth in March 2020 was lower, as the government had imposed complete lockdown to prevent spread of the coronavirus, which halted the economic activities.

At present, the third wave of the coronavirus is again threatening human life and the country’s economy. However, the government has not decided about a complete lockdown yet.

LTO Karachi’s refund disbursement grew by 118 percent in March 2021, as it issued Rs6.64 billion compared with Rs3 billion in the same month of the last year.

The tax office issued the refunds as per the policy of the Federal Board of Revenue (FBR) to facilitate taxpayers, who were facing difficult times due to adverse financial impact of the coronavirus on their businesses.

LTO Karachi is a major revenue collection arm of the FBR. The tax office contributes around 35 percent out of the total revenue collection at national level.

The FBR collected Rs3,394 billion during the first nine months (July-March) 2020/2021 as compared with Rs3,076 billion in the corresponding period of the last fiscal year, showing a growth of 10 percent.

Meanwhile, LTO Karachi collected Rs1,126 billion during first nine months of the current fiscal year as compared with Rs636 billion in the corresponding period of the last fiscal year, showing 16 percent growth.

The issuance of refunds has increased by 100 percent to Rs72 billion during July-March 2020/2021 as compared with Rs36 billion in the same period of the last fiscal year.

The breakup of revenue collection revealed that the tax office fell short of assigned target for direct tax collection, but posted 12 percent increase in direct tax collection for the period under review.

The collection of direct taxes was at Rs177 billion during the first nine months of the current fiscal year as compared with Rs158.43 billion in the corresponding period of the last fiscal year.

The collection of sales tax posted 19 percent growth to Rs906 billion during the period under review as compared with Rs759 billion in the same period of the last fiscal year.