LTO Karachi Sets New Record with 20% Tax Collection Growth

The Large Taxpayer Office Karachi has shown improvement in tax collection. It has reached new heights with a benchmark of 20% over the same period of last calendar year. According to the LTO Karachi, the provincial government received Rs1,110 billion in taxes during the first five months of FY 2024-25. It shows a noteworthy increase from Rs924 billion in the same period of the last fiscal year.

The direct tax collection also registered a significant 20% increase to Rs542 billion compared to Rs451 billion last year. Moreover, LTO Karachi disbursed refunds of Rs47 billion during the said period.

Read more: Vehicle Registrations to be Cancelled for Tax Defaulters from 2025

This growth was mainly due to increased local activity as seen in the increased local transactions. Just the sales tax collection was up 30% to Rs203 billion. However, the FBR sources revealed that the collection of import sales tax faced challenges because of a decline in import bills.

Despite these achievements, the Federal Board of Revenue (FBR) has faced criticism from its officers. The Inland Revenue Service Officers Association (IRSOA) has blamed tax administration and policies for the shortfall in tax collection targets. In a statement, the IRSOA rejected claims that officers were at fault for the shortfall, attributing the failure to flaws in the administration and policies.

The association also criticised the FBR’s transformation plan, calling it a “show-piece” that has caused dissatisfaction among tax officials. They highlighted that 80% of junior field tax officers have the lowest salaries and lack access to basic facilities such as transport, fuel, and residential options. Furthermore, large-scale transfers to remote areas have created logistical difficulties. The IRSOA emphasised that frequent transfers and corruption allegations are damaging the officers’ reputation and morale. “Harsh administrative practices and poor tax policies are undermining the officers’ capabilities and morale,” he stated.