KARACHI: Advance tax collection from registration of new motor vehicles has surged by 62 percent during first half (July – December) of the current fiscal year (1HFY21).
The collection of advance tax increased to Rs730 million during the first half of the current fiscal year as compared with Rs450 million in the corresponding half of the last fiscal year, sources at Regional Tax Office (RTO)-I Karachi said on Tuesday.
The RTO-I Karachi collects advance tax on motor vehicle registration under Section 231B of the Income Tax Ordinance, 2001.
Sindh Excise and Taxation Department collects the advance tax on behalf of the RTO-I Karachi as withholding agent at the time of registration of motor vehicles.
It is worth mentioning that the Sindh Excise and Taxation Department had stopped the collection from July 01, 2020 after the Federal Board of Revenue (FBR) recovered an amount of Rs5 billion from the provincial accounts.
After negotiations between the federal and the provincial governments, the Sindh Excise and Taxation Department resumed the collection of advance tax from October 2020.
The collection sharply increased following the Sindh excise and taxation department resumed its operations. The collection of advance tax posted 222 percent growth to Rs222 million during the month of December 2020 as compared with Rs69 million in the corresponding month of the last year.
The sources at the RTO-I Karachi attributed the rise in collection to revival of economic activities in the country witnessed during early months of the current fiscal year after ease in coronavirus related lockdown.