LTO collections cross Rs1tr for first time
Sources said that the IMF was building its case on the assumption that growing imports - a key source for the exceptionally good tax collection - would eventually slow down. Photo: File
Despite difficult business conditions, the Large Taxpayers Office (LTO) Karachi received a record revenue of more than Rs1 trillion during the first half (Jul-Dec) of the current financial year.
In Jul-Dec FY24, the LTO collected Rs1,220 billion as compared to the target of Rs1,216 billion. In December 2023 alone, the tax department got revenue of Rs320 billion, which was higher than the target of Rs316 billion.
LTO Karachi Commissioner Girdhari Mal unveiled the figures while speaking at a press conference on Wednesday.
He pointed out that in the first half of FY24, the tax office recovered Rs24 billion from defaulters, adding, however, that revenue worth Rs38 billion was stuck in litigation.
He emphasised that the LTO was successfully achieving its monthly tax targets and in Jul-Dec FY24 revenue receipts including on imports surged 51%. With sales tax on imports and domestic sales, the revenue collection increased 57%.
Between July and December, sales tax and income tax refunds of Rs75 billion were issued, which represented a rise of 100%. Of the total collection, direct tax had a share of 55% while indirect tax contributed 45%.
In the six-month period under review, 69% of revenue came from local taxes while 31% came from the import sector.
Read IMF tax collection target surpassed
The LTO commissioner said that tax receipts were improving at the local level, adding in the half year, withholding tax comprised 28% of total collection while non-withholding tax had a share of 72%.
Similarly, the share of receipts through tax returns was Rs54 billion. He revealed that the contribution of cotton ginners, banking, shipping, insurance, pharmaceutical, tiles, food and software sectors in tax payments remained high.
However, receipts from the automobile, auto parts and construction industries decreased. A reason was the losses suffered by the auto industry owing to tough business conditions during the period under review.
The commissioner added that 1,064 tier-1 retailers were connected to the Federal Board of Revenue (FBR) through the Point of Sales (POS) network in Jul-Dec FY24 and 2,594 POS machines had so far been installed.
Revenue worth Rs4.4 billion was received through the POS system, from which collections rose 29%. “Out of the 105 complaints received from the Federal Tax Ombudsman, 85 were decided while 20 were being reviewed.”
Published in The Express Tribune, January 4th, 2024.
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