KARACHI: The Large Taxpayer Office (LTO) Karachi has achieved a new milestone in tax collection, reporting a 20% increase in receipts compared to the same period last year.
During the first five months of the 2024-25 fiscal year, LTO Karachi collected Rs1,110 billion in taxes, marking a significant rise from Rs924 billion during the same period last year.
Direct tax collection by LTO Karachi totaled Rs542 billion, up from Rs451 billion in the previous year, reflecting a 20% increase. The office also issued Rs47 billion in refunds during this period.
Meanwhile, indirect and sales tax collection saw an 18% increase, reaching Rs494 billion, compared to Rs420 billion in the same period last year. The growth was largely driven by higher local transactions, with sales tax collection rising by 30% to Rs203 billion. However, challenges remain in collecting import sales tax due to a decline in import bills, according to sources from the Federal Board of Revenue (FBR).
Overall, LTO Karachi, also known as the ‘Mini FBR,’ collected Rs1,160 billion in total taxes in the first five months of the fiscal year 2024-25.
Meanwhile, the Federal Board of Revenue (FBR) has been criticized for the shortfall in meeting its tax collection targets. FBR officers have pointed to issues with tax administration and policies, which have hindered the achievement of revenue goals.
The Inland Revenue Service Officers Association (IRSOA) rejected claims that officers were underperforming in tax collection. In a statement, the IRSOA attributed the failure to meet targets to flaws in tax administration and policies.
The association also criticized the FBR’s transformation plan, calling it a superficial initiative that has led to discontent among tax officials. They highlighted that 80% of junior field tax officers receive low salaries and face challenges, such as lack of transport, fuel, and residential facilities. Additionally, the association pointed out that the frequent transfer of officers to remote areas, combined with corruption allegations, has hurt both the morale and the reputation of tax officials.
The IRSOA concluded that harsh administrative practices and ineffective tax policies have been undermining the capabilities of tax officers.
