Tax returns from Karachi's low-income markets surprisingly high

FBR could only collect Rs175 from upscale markets in Clifton Block 5

KARACHI:

Karachi's wholesale and retail markets, which meet the needs of low-income and middle-class sections of society, have been regularly submitting their due taxes in accordance with their incomes. Despite that, however, they remain deprived of basic amenities, The Express Tribune has learned.

In comparison, tax collection from big commercial markets and food streets of Karachi, situated in the city's posh areas like Clifton Block 5, have been exceptionally low. Surprisingly, only four businessmen filed their returns, paying a total of Rs175 in taxes in 2018.

On the other hand, 807 vendors from Karachi's famous Burns Road Food Street have paid more than Rs111.3 million in taxes. Karachi's Lalukhet market erased the gap between the rich and poor by paying taxes equal to the Tariq Road market.

According to the income tax data released by the Federal Board of Revenue (FBR) for the financial year 2017-2018, the markets in the Saddar area of Karachi paid a total of over Rs77 billion in taxes. The collected tax is more than the tax revenue generated from industrial cities like Faisalabad, Sialkot, Wazirabad, and Gujranwala. More than 100 shopping malls and bazaars in Karachi have paid a total income tax of over Rs94 billion, of which 82 per cent came from Saddar bazaar.

Data showed that about 10,803 shopkeepers from the markets of Liaquatabad, an area which suffered the most throughout the ongoing 12-year political tug of war between the Sindh government and the Muttahida Qaumi Movement (MQM) and lost millions of rupees in the recent rains, submitted an income tax worth Rs1billion. After three weeks of torrential rains, most shops in Liaquatabad still have sewage water accumulated in the area and hundreds of shopkeepers are experiencing bankruptcy like situation due to the flooding of shops.

Along with shopping malls selling new items, second-hand markets for clothes, bags, shoes, and other daily necessities have also been filing the taxes regularly. Markets like Light House and Lunda Bazar have paid Rs55.2 million in taxes. Empress Market, which was recently displaced and shifted to another area, paid a tax of Rs196.5 million.

About 540 booksellers from Urdu Bazaar paid Rs26.44 million, shops in Soldier Bazaar paid more than Rs32 million, while about 200 vendors of Babar Market in Landhi paid more than Rs10 million in taxes.

After many years of unrest, extortion and killings, the Sher Shah Kabari Market, which has now come to a standstill due to local government issues, also paid a tax of Rs26.8 million. The collection of income tax from clothing markets in Karachi was also high. The Jama Cloth Market paid a tax of Rs18.4 million, the Jubilee Cloth Market paid a tax of Rs74.2 million, cloth wholesale market in Karachi paid a tax of Rs42.4 million, Haideri Market paid Rs180 million. On the other hand, Gul Plaza, the centre for imported goods, paid Rs64.5 million, while Rs215.2 million was collected from Karachi's Vegetable Market (Sabzi Mandi).

The Meena Bazaar, a centre for women's jewellery and beautification products, filed a tax return of Rs17.8 million. Uni Center, the market for computer equipment, paid a tax of Rs600 million. Traders at Timber Market, the country's largest timber trade centre, paid Rs233.1 million in taxes, whereas the Tibet Center Market for vehicle spare parts, paid a tax of Rs10.5 million.

The car showrooms and shops located at the Site Industrial Avenue paid a total of over Rs6 billion in taxes. About 202 shops located in a building of Market Forum, a favourite market of the affluent class in Karachi, paid Rs3.31 billion in taxes. Up-scale brand shops located at Karachi's Park Tower Shopping Mall paid 621.8 million.