The Large Taxpayer Unit (LTU) has contributed 13 percent to the total revenue collected by the Central Board of Revenue, thus surpassing all revenue targets in income tax, sales tax and central excise.
Of the total Karachi-based revenue, LTU share was more than half (51 percent) during the outgoing financial year.
According to provisional figures released on Thursday, the total revenue collected by the LTU was Rs 64.2 billion in 2003-04. Of this, the income tax collections stood at 39.3 billion as against Rs 33.2 billion, giving an increase of 18 percent.
The LTU collected Rs 31.3 billion from sales tax as against Rs 27.7 billion last year, registering a first time increase of 13 percent.
The progressive increase in the Central Excise Duty (CED) this year is five percent over the previous year's collections. It collected Rs 5.1 billion as against Rs 4.9 billion last year.
A tremendous growth of 453 percent, witnessed in payment of sales tax refunds during the year, which amounted to Rs 12.1 billion against Rs 219 million only last year.
The salient feature of the tax management policy of the Unit is to gradually reduce collection from withholding tax, which result in payment of refund.
The share of wealth tax in total collection has been reduced from 24 percent last year to 18 percent this year. It also refrained from making attempts to recover undue tax, which later created cause for refunds.
The department laid special focus on liberally issuing exemption certificates during the year. It issued 932 certificates against 984 applications. As many as 158 exemption certificates were issued on June 30 for the next year.
As a result of promotion of volunteer payment of taxes pursued by the Unit, the tax deposited with returns was 70 percent more than the last year. The amount of tax collected with returns was Rs 3,000 million as against Rs 1,757 million last year.
The Unit recovered Rs 900 million through sales tax audit as compared to Rs 82 million recovered last year.
The payment of refund in all taxes this year exceeded by 30 percent over last year. The total refund in income tax, sales tax and central excise amounted to Rs 11,568 million. All refund pertaining to 2003 have been cleared.
The LTU has expedited the process of disposal of appeals to provide a major relief to the taxpayers.
They have been offered to use the platform of the Alternate Dispute Resolution Committee, while their appeal is pending. This would greatly reduce the cost of litigation and time consumed in appeals by the taxpayers.
Another salient feature of tax collection strategy of the Unit is to promote voluntary tax compliance, which showed results this year when not a single notice under section 92 (freezing of bank accounts) was issued in June, which was earlier known as the month of intimidation and coercion indulged by the tax officials to meet the revenue targets.
The Unit faced some problems in conducting audit of multi-national firms. To resolve the problem, the CBR has decided to assign its officers to these firms to help them understand their functioning.
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