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Karachi LTU collects Rs158b in 2 months

Karachi LTU collects Rs158b in 2 months

KARACHI: The Federal Board of Revenue’s Large Taxpayers Unit (LTU) collected Rs158 billion during the first two months of the current fiscal year.

LTU Karachi that contributes around 40 percent in the net collection of Inland Revenue nationwide collected Rs152.89 billion in the July-August period of the last fiscal year. The officials said the unit managed to achieve growth despite a sharp decline of 39 percent in collection of direct taxes.

LTU Karachi collected Rs9.84 billion in direct taxes in the July-August period compared to Rs16.22 billion a year earlier.

The officials attributed a sharp decline in direct taxes to higher amount of refunds issued or adjusted against payable liabilities.

Refunds in income tax surged 235 percent year-on-year to Rs3.88 billion during the period under review. Similarly, the taxpayers registered with the LTU Karachi adjusted around Rs2.28 billion against their payables compared to Rs1.98 billion, posting a 15 percent year-on-year growth.

The officials said the reduction in the tax rate for the tax year 2019 to 29 percent also contributed in decline. Corporate tax was reduced by one percent to 29 percent in the last budget from 30 percent. Corporate tax rate will gradually be cut to 25 percent till the tax year 2023.

The collection of indirect taxes increased eight percent to Rs148.2 billion in July-August over the same period last year.

The component of sales tax collection at domestic stage in the indirect taxes posted an eight percent growth to Rs25 billion.

Sales tax collection at import stage, however, surged 41 percent to Rs25 billion during the period under review. Rise in import tax rates helped sharp growth under the head.