Karachi breaks new record in tax collection

KARACHI: The Large Taxpayer Office (LTO) Karachi has set a new record in tax collection, reporting a 20 percent (pc) increase in tax receipts compared to the same period last year, ARY News reported.

Reports suggest that, during the first five months of the fiscal year 2024-25, LTO Karachi collected Rs1,110 billion in taxes, a significant rise from Rs924 billion in the corresponding period of the previous fiscal year.

LTO Karachi’s direct tax collection during the first five months amounted to Rs542 billion, up from Rs451 billion in the same period last year, marking a 20pc increase. The office also issued Rs47 billion in refunds over the same period.

Indirect and sales tax collection by LTO Karachi saw an 18pc rise, accumulating Rs494 billion in the first five months. This compares to Rs420 billion collected in the corresponding period last year.

The increase is largely driven by higher local transactions, where sales tax collection saw a 30pc jump to Rs203 billion. However, challenges remain in the collection of import sales tax due to a decline in import bills, according to sources from the Federal Board of Revenue (FBR).

LTO Karachi, also known as the ‘Mini FBR,’ has collectively collected Rs1,160 billion in total taxes over the first five months of the fiscal year 2024-25.

Read More: FBR officers criticize tax administration, policies for low collection

Earlier, the Federal Board of Revenue (FBR) officers held tax administration and policies responsible for the shortfall in the tax collection target.

In a statement, the Inland Revenue Service Officers Association (IRSOA) rejected the impression of officers lacking in collecting tax.

The failure to meet tax collection targets is attributed to flaws in tax administration and policies, the IRSOA said in its statement released on Monday.

The Inland Revenue Service Officers Association also criticised the FBR’s transformation plan and termed it a mere show-piece that has caused discontent among tax officials.

The statement said that 80pc of junior field tax officers have the lowest salaries and many lack access to transport, fuel, and residential facilities.

The association pointed out the large-scale transfers of tax officers to remote areas have also created logistical difficulties. Frequent transfers accompanied by corruption allegations are damaging the reputation and dignity of tax officers.

“Harsh administrative practices and poor tax policies are undermining the officers’ capabilities and morale.”