KARACHI: Regional Tax Office (RTO)-II Karachi posted 32 percent jump in revenue collection to Rs26.43 billion in the first quarter of the current fiscal year as tax rates on non-compliance increased during the period, reported The News.
Revenue collection by the regional Karachi office amounted to Rs19.98 billion in the July-September period of last fiscal year.
The tax office in its BTB campaign in recent past issued notices to a large number of business individuals operating in various sectors. Notices were also issued to those who make big transactions but are not on the tax roll. The sources also attributed the higher revenue growth to change in tax laws and burdening of the non-compliant taxpayers with 100 percent increase in withholding tax rates, claimed the report.
The Federal Board of Revenue imposed 100 percent higher withholding tax rates on various transactions by non-filers of tax returns under the tenth schedule of Income Tax Ordinance 2001 introduced in the current fiscal year’s budget.
The break-up of revenue collection of the RTO-II Karachi showed that the collection of income tax registered 35 percent growth. The tax office collected Rs24.72 billion during July-September 2019 compared with Rs18.28 billion in the same period of the last fiscal year.
The collection of withholding income tax on profit on debt jumped 194 percent to Rs14.56 billion during the first quarter of the current fiscal year as compared to Rs4.95 billion in the corresponding quarter of the last fiscal year.
The normal withholding tax rate on profit on debt paid by banking companies is 10 percent on amount of up to Rs0.5 million and 15 percent on amount exceeding Rs0.5 million. However, if individuals are not on the active taxpayers list the tax rates are applicable at 20 percent and 30 percent, respectively.