Tax collection from Karachi has hit a new high. The Large Taxpayer Office (LTO) Karachi reported a 20% increase in tax receipts compared to last year.
In the first five months of the fiscal year 2024-25, LTO Karachi collected a staggering Rs1,110 billion in taxes. This marks a significant rise from Rs924 billion in the same period last year.
Direct taxes contributed Rs542 billion, up from Rs451 billion last year, reflecting a 20% increase. During this period, the office also issued Rs47 billion in refunds.
Meanwhile, indirect and sales tax collection saw an 18% rise, totaling Rs494 billion. This is compared to Rs420 billion collected in the same period last year.
The surge in tax collection is primarily driven by a 30% rise in local sales tax, reaching Rs203 billion. However, challenges remain in collecting import sales tax due to a decline in import bills, sources from the Federal Board of Revenue (FBR) said.
Known as the ‘Mini FBR,’ LTO Karachi has now collected Rs1,160 billion in total taxes for the first five months of fiscal year 2024-25.
In related news, officers from the Federal Board of Revenue (FBR) have voiced concerns about the shortfall in tax collection targets. They blamed flaws in tax administration and policies for the gap.
The Inland Revenue Service Officers Association (IRSOA) rejected the idea that officers are to blame for poor tax collection. Instead, they pointed to administrative and policy flaws.
The IRSOA also criticized the FBR’s transformation plan, calling it a superficial initiative that has caused dissatisfaction among officials.
The association highlighted that 80% of junior field tax officers receive low salaries and lack basic resources like transport and fuel. They also raised concerns about large-scale transfers to remote areas, which have created logistical problems and tarnished the reputation of tax officers.
The IRSOA concluded that harsh administrative practices and ineffective tax policies are eroding the morale and effectiveness of officers.