The Large Taxpayers Office (LTO) Karachi has reported a significant increase in tax collection, recording a remarkable 24% growth during the period of July to April 2022-2023 compared to the previous fiscal year.
Official sources Wednesday confirmed that the LTO Karachi collected approximately Rs1.56 trillion in the first ten months of the current fiscal year, compared to Rs1.26 trillion during the same period in the last fiscal year.
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Direct Tax Collection Soars, Sales Tax Remains Flat Amid Challenging Economic Situation
As the largest revenue collection arm of the Federal Board of Revenue (FBR), the LTO Karachi alone contributes around 26% to the national revenue collection.
Notably, the tax office witnessed a substantial increase in the collection of direct taxes during the reviewed period. Direct tax collection surged by 60% to reach Rs727 billion in the first ten months of the current fiscal year, compared to Rs454 billion in the corresponding months of the previous fiscal year.
Within the category of direct taxes, the unit achieved a 53% increase in gross collection of income tax, which amounted to Rs728 billion during the reviewed period, as compared to Rs476 billion in the same period of the last fiscal year.
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The surge in direct tax collection can be attributed to the measures implemented in the budget for the year 2022-2023 regarding income tax.
However, sales tax collection remained stagnant during the period due to the challenging economic situation and the exemption of sales tax on petroleum products. Sales tax collection stood at Rs761 billion during July-April 2022-2023, reflecting a nominal increase of 1% from Rs751 billion in the corresponding period of the previous fiscal year.
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On the other hand, the recent increase in federal excise duty rates on cigarettes, soft drinks, and juices contributed to a 23% growth in FED collection for the LTO Karachi. The net collection of FED rose to Rs76 billion during July-April 2022-2023, compared to Rs61 billion in the same period of the last fiscal year.
The Federal Board of Revenue (FBR) is currently facing challenges in national revenue collection due to a deteriorating economic condition, reduced productivity, and import restrictions. Experts predict a significant shortfall in revenue collection by the end of June 2023.
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However, the strong performance of the LTO Karachi may help mitigate the shortfall and assist the national tax agency in achieving its revenue collection targets by the end of the current fiscal year.
