KARACHI: Large Taxpayers Unit (LTU) Karachi, the main revenue collecting arm of the Federal Board of Revenue (FBR), has posted 16 percent growth in the tax collection to Rs304.3 billion in the first quarter of the current fiscal year of 2019/20, sources said on Thursday.
The unit managed to meet over 80 percent of the quarterly target despite contraction in the economy, they said. The LTU Karachi collected Rs262.2 billion in taxes during the July-September quarter of the last fiscal year.
The unit collected around 32 percent of the total tax revenue of the FBR at the national level during the first quarter of the current fiscal year. The FBR provisionally collected Rs960 billion during the same period of the 2019/20 as against the target of Rs1.071 trillion, reflecting a shortfall of Rs111 billion.
The collection was, however, around 15 percent compared with Rs836 billion in the corresponding period last fiscal. The LTU Karachi was assigned a revenue collection target of Rs375.28 billion during the first quarter and it managed to achieve around 81 percent of the assigned target.
The sources in the LTU Karachi said the revenue collection remained challenging due to slowdown in the economy, as large scale companies saw erosion in their profitability. Reduction in imports also hurt revenue collection, they added. Imports dropped 21.4 percent year-on-year to $7.677 billion in the first two months of the current fiscal year.
The head-wise collection showed the unit received Rs38.76 billion as income tax during the first quarter compared with Rs34 billion in the same quarter of the last fiscal year. The collection of sales tax posted 16 percent increase to Rs250.6 billion during the period under review.
The collection, in this head, amounted to Rs215 billion during the same period of the last fiscal year. The sources said the collection of sales tax increased due to amendments introduced in the income tax law through the Finance Act 2019.
The major impact was seen due to abolishment of sales tax zero-rating regime. Besides, several exemptions and concessions related to sales tax were also rationalised during the budget for FY2020.
The collection of federal excise duty by the LTU Karachi posted 14 percent growth to Rs15 billion during the July-September period. The collection stood at Rs13 billion in the same period of the last fiscal year.
The LTU Karachi also has jurisdiction over collection of sales tax on imported goods. Total revenue collection from imported goods grew 19 percent to Rs203.26 billion during the first quarter of the current fiscal year.
The collection amounted to Rs171.5 billion in the corresponding period of the last fiscal year. Total collection from domestic sources registered 11 percent growth from Rs90.7 billion in the July-September quarter FY2019.
(This news/article originally appeared in The News on October 11th, 2019)