Tax collection grew 29 percent to Rs84 billion in nine months
KARACHI: Regional Tax Office (RTO) -II Karachi posted a 29 percent growth in revenue collection during the first nine months of the current fiscal year 2019/20, official data showed on Tuesday.
The tax office collected Rs84 billion in July-March FY2020 compared to Rs65 billion in the same period last fiscal year. Sources said the tax office witnessed slower revenue growth in March because it was locked in most countries to stop the spread of the corona virus.
However, revenue growth for three quarters was unprecedented despite a sharp decline in tax deductions from cash withdrawals. The tax office witnessed a setback in revenue collection at the head of cash withdrawals from banks, which fell 62 percent. It collected Rs6 billion during July-March compared to Rs15.9 billion in the same period last year.
The advance tax remains in effect until February 2019. Through the Financial Supplementary Act (Second Amendment), 2019, the tax application is withdrawn for people who comply with the filing of income tax returns.
Then through the Finance Act, 2019, withholding tax on cash withdrawals is limited to people who don’t appear on the list of active taxpayers. Karachi’s RTO-II also witnessed a reduction in tax cuts under many other heads because of changes in the law.
However, increased tax collection can be attributed to the expansion of tax office tax efforts. The tax office is taking steps to bring professionals and the economic sector into the tax net. Karachi’s RTO-II recently issued a notification to doctors, teachers and fashion designers to file income tax returns and declare their wealth.
The collection of the head of the tax office revealed that he collected Rs79 billion as income tax during the first nine months of the current fiscal year compared with Rs60.62 billion in the same period last fiscal year, showing 31 percent growth.
The office collects Rs5 billion as sales tax during the period reviewed compared to Rs4.4 billion in the same period last fiscal year. The tax office collected Rs7.5 billion during March 2020 compared with Rs6.7 billion in the same month in 2019, showing a 12 percent growth.
In previous months, the tax office revenue collection growth was in the range of 40 percent and 60 percent. Sources said the collection would be affected due to ongoing locking.
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