Regional Tax Office Karachi has conveyed to the Federal Board of Revenue that the regional tax authorities would make all possible efforts to achieve the target of the second quarter (October-December) of 2010-11 if logical revenue collection targets are fixed by the tax managers.
In a letter to the FBR Member Domestic Operations South, RTO Karachi said that the revised target fixed by the Board for first quarter 2010-11 was imaginary and without any basis. The FBR has revised the revenue collection target of Rs 31.391 billion during first quarter of the fiscal to Rs 34.130 billion.
According to the RTO Karachi, the Board had fixed target for the first quarter of 2010-11 at Rs 31.391 billion, an increase by Rs 5.482 billion in comparison to collection made in the corresponding period last year. This higher increase was in the backdrop of transfer of potential revenue yielding cases of income tax as well as sales tax to LTU Karachi vide Board notifications issued during preceding year involving revenue of Rs 15.119 billion as mutually worked out by Pral.
The RTO Karachi said that appreciating the transfer of major revenue yielding cases to LTU Karachi, the FBR had fixed the Sales Tax Budget for the last quarter of financial year 2009-10 at Rs 3.0 billion ie Rs 1.0 billion per month whereas, budget of sales tax for the first quarter of 2010-11 has been fixed at Rs 7.6 billion which is 153 percent higher than the budget fixed for last quarter.
It said that despite all the odds this office (RTO Karachi) was able to make collection of Rs 34.130 billion which depicts an increase 31.73 percent in comparison to collection made during the corresponding period of last year. This increase over the target fixed for last year is much more than the national target fixed by the Ministry of Finance.
However, the target for the first quarter was revised by the Board in the last month of this quarter at Rs 43.970 billion increasing the target of this quarter by 60.70 percent as compared to the first quarter of last year. The RTO Karachi vide letter bearing No 3147 dated September 07, 2010 requested the FBR to revisit the target fixed for the first quarter as revised target was imaginary and without any basis.
It was verbally assured by FBR authorities that target originally assigned to RTO, Karachi for the first quarter of the financial year 2010-11 would not be changed. Moreover, the Board would appreciate that the target assigned for the first quarter fixed by the Board has been duly achieved since targets cannot be increased every'' month without any justification.
That the Board''s instructions have been conveyed to all Enforcement & Collection Divisions, RTO, Karachi to collects at least 70 percent of the collectable demand by December 31, 2010.
The FBR would appreciate that the major energies of RTO during the first quarter were spent on disposal of audit paras which required hard work as record of Sales Tax received from defunct Sales Tax Collectorate was in total disarray and is being properly arranged as conveyed to the Board.
The RTO Karachi said that the shortcomings pointed out with regard to monthly performance report on Enforcement Plan MREA II & III have already been corrected while reporting the figures for the month of October 2010, and further correction would be made by December 2010. All efforts shall be made to achieve the target for the second quarter of the financial year 2010-11 if these are logically fixed, RTO Karachi added.