The Medium Taxpayer Unit (MTU) Karachi has collected Rs 22.8 billion in the last fiscal year 2005-06 as compared to Rs 17.7 billion during the fiscal year 2004-05, depicting an increase of 29 percent.
Asrar Raouf, Commissioner of Income Tax while talking to the Business Recorder here on Wednesday said the figures were provisional and hopefully total collection would touch Rs 23 billion after receiving all receipts.
He said that 29 percent increase in the MTU collection was a remarkable achievement while the collection in national level posted 18 percent increase. He said that efficient monitoring and effective polices had resulted in the increase of tax collection by the MTU.
He said that the government's business friendly policies had increased the economic activities, which brought about the mushrooming of businesses in the country resulting in increase in collection. He said that the government's reforms introduction and reposing confidence in the taxpayers had also taken them out of the fears. The Universal Self-Assessment Scheme has enabled the medium taxpayers to declare their income tax liability, which would also be acceptable to the Income Tax Department and unnecessary procedures had also been eliminated, he added.
The commissioner said the MTU concentrating on increasing tax-to-GDP ratio, which declined from 9.3 percent to 9 percent. "Although tax collection is increasing but to raise the tax-to-GDP ratio we need to enhance the number of taxpayers." He said in the last fiscal year the MTU population increased from 0.216 million to 0.278 million which was an increase of 61,381. The salary class taxpayers increased to 229,608 an increase of 42,600 from 187,008 while non-salary class taxpayers increased to 48,136 an increase of 18,781 from 29,355.
He said that the MTU has been made functional based rather than circle based. Now a taxpayer has to go through five departments ie auditing, enforcement, tax facilitation, legal and information processing. The steps were taken to minimise corruption.
Raouf said that currently the tax departments were dispersed in different areas of Karachi adding by December all offices will be accommodated in one building. Sales Tax, Income Tax and federal excise would co-locate and people would be facilitated at the same place. A plan to conduct desk survey for creating more taxpayers, the plan would be implemented subjected to federal government approval, he said.
An intranet connected around 21 offices and 30 officers which made the MTU Karachi a paperless organisation. The system was implemented from July 1, 2006, he said and added that from August 2006 the MTU was starting online newsletter.
For increasing officials performance he said the MTU has started social welfare activities and decided to make tax officials' club. The Chairman Central Bureau of Revenue (CBR) would inaugurate the club in his up coming visit. Praising CBR chairman, he said the person has a professional approach and has complete control over the reforms of the CBR.
Giving the statistics of the last year's collection he said on account of arrears demand, the MTU has collected Rs 7.279 million a 51.60 percent decrease as compared to Rs 15.042 million of last year. While, collection of the current demand has increased to Rs 22.826 million compared to Rs 5.077 million last year. Commenting on arrears demand, Raouf said that the collection process has been enhanced on yearly basis, which declined the amount of arrears demand.
Tax with return also moved up to Rs 397.385 million a 17.80 percent increase against Rs 337.332 million last year. MTU Karachi under withholding taxes has collected Rs 21.197 billion a 23.48 percent increase compared with Rs 17.16 billion collected in 2004-05.
The MTU has issued or adjusted the refund taxes of Rs 496 million at 111 percent increase compared with Rs 236 million during the last fiscal year, he said and added number of claims settled 10,879 as compared with 6,737 of last fiscal year. A jump of 166.26 percent has seen in the CVT to Rs 2054.419 million from Rs 771.555 million.