KARACHI, Jan 18: The Southern Region of Income Tax, Karachi, collected Rs13.835 billion during the first half of current fiscal year (2005-06), showing an increase of around 29 per cent over the corresponding period last year, when collection of direct taxes stood at Rs10.771 billion.

The current growth in economic activity, coupled with intensive monitoring of revenue collection, helped the department to exceed the target fixed by the Central Board of Revenue by 17.5pc.

Major chunk of the collections came from withholding tax which stood at Rs12.361 billion as against Rs9.834 billion recorded in the same period last year. A record payment and disbursement of refunds was also made by the Southern region during the period under review.

Talking to Dawn on Wednesday, the Regional Commissioner of Income Tax, Southern region (RCIT), Abrar Ahmed said that under the vision given by the chairman CBR, the region managed to make a breakthrough by recording 29 per cent growth in revenue collection.

He said the new approach of treating taxpayers as clients, reposing confidence in them and encouraging them to voluntary compliance on the basis of Universal Self-Assessment Scheme (USAS) had developed new relationship between tax collectors and taxpayers.

Mr Ahmed said that the first six months (July-Dec 2005) collection of Rs13.835 billion could further improve, once the region collects tax challans from out-stations like Sukkur and Hyderabad. Similarly, he said there would also be a further increase, once the collection figures are reconciled.

“I would say that the final revenue collection figures for the first half of current fiscal year could well cross Rs14 billion,” the RCIT asserted.

Giving other details of revenue collection, he said that the region collected Rs2.567 billion as income tax from the contract employees as against Rs2.436 billion fetched during the corresponding period of last year.

The tax collected on exports rose to Rs2.567 billion showing an increase of around 50 per cent against Rs1.912 billion collected in the same period last year.

There was a fabulous increase in tax collection from the salaried class, which increased to Rs3.258 billion from Rs2.975 billion in the corresponding period of last year. This increase could be on account of expansion in the corporate sector, where the salary structure is mostly market based, rather than on fixed and traditional system.

A remarkable increase in workers’ welfare fund (WWF) was also recorded at Rs173 million as against Rs154 million. The Capital Value Tax (CVT) made a handsome growth at Rs914 million compared to Rs246 million recorded in the same period last year.

Official circles believe that once the tax authorities start the assessment process, the revenue collection will increase manifold ushering a new chapter in tax collection.

However, the tax consultants are of the view that still, there was a greater need to bring about a positive change in the mindset of tax collecting machinery otherwise, this new initiative may harm the current improved environment and relationship between the tax collectors and the taxpayers.