Karachi – The Medium Tax Office (MTO) in Karachi has reported an extraordinary 80% year-on-year increase in tax collections for April 2024, according to the latest provisional figures released this Tuesday.
This significant growth in revenue underscores the office’s increasing effectiveness in tax administration within the city.
In detail, the MTO Karachi, which serves as a crucial arm of the Federal Board of Revenue (FBR), has amassed a net collection of Rs 17.5 billion this April. This figure stands in stark contrast to the Rs 10 billion collected in April of the previous year, highlighting a robust improvement in its operational outcomes.
Breaking down the figures, income tax collections alone soared by 53% to reach Rs 7.39 billion this year, up from Rs 4.87 billion in April last year. More impressively, sales tax collections nearly doubled, with a 104% increase, accumulating Rs 9.82 billion compared to the previous Rs 4.66 billion. Furthermore, the collection of federal excise duty also saw a significant surge, recording an increase of 118% to Rs 832 million from Rs 381 million in April of the previous year.
The MTO Karachi’s exceptional performance isn’t limited to just this month. Looking at the first ten months of the fiscal year 2023-24, the tax office reported a 50% increase in tax collections compared to the same period in the previous fiscal year. During this timeframe, MTO Karachi has collected a total of Rs 175.63 billion, markedly up from Rs 117.35 billion in the corresponding months of the last fiscal year.
In terms of specific taxes, income tax collections during these ten months have seen an 80% increase, totaling Rs 85.83 billion as opposed to Rs 47.60 billion collected in the previous fiscal year. Sales tax collections over the same period grew by 31% to reach Rs 82.86 billion, up from Rs 63.38 billion. Additionally, federal excise duty collections grew by 9%, totaling Rs 6.94 billion.
This substantial growth in tax collections by MTO Karachi reflects not only the expanding economic activities in the region but also improved compliance and enforcement measures implemented by the tax office. Enhanced audit mechanisms and the digitization of tax collection processes are believed to be major contributors to this success.
The achievement is particularly noteworthy given the broader economic challenges facing the country, including inflationary pressures and international financial instability. It also aligns with the FBR’s increased focus on enhancing tax revenue streams as a means to stabilize and grow the economy without overburdening the existing tax base.
Looking forward, the MTO Karachi aims to maintain this growth trajectory through ongoing reforms and the introduction of more user-friendly tax compliance systems. These initiatives are expected not only to bolster tax collection figures further but also to enhance taxpayer confidence in the system, fostering a culture of compliance and transparency in one of Pakistan’s busiest economic hubs.
