KARACHI, Jan 24: The revenue collection by the Southern Region of Income Tax rose by 19.73 per cent to record Rs17.990 billion during the first half (July-Dec) of the current fiscal year as compared to Rs15.025 billion collected the same period last year.

Officials attributed the rise in revenue collection to hike in economic activity and ongoing massive development work being carried out by the government in the southern tax region, which stretches from Karachi, Hyderabad, Sukkur to Quetta.

However, after paying huge refund claims the net revenue collection of the region stood at Rs16.595 billion compared to Rs14.076 billion collected the same period last year.

Payment of refunds showed a staggering rise of 48 per cent at Rs1.404 billion during the period under review as against Rs949bn were paid in the corresponding period last year.

However, the major chunk of revenue generated from withholding tax, which indicates that the Central Board of Revenue (CBR) still heavily relies on collecting agencies.

Official data showed that withholding tax collection rose by 23.30 per cent at Rs15.637 billion during July-Dec 2006-07 compared to Rs12.781 billion collected the same period last year.

This also indicates that around 85 per cent of revenue collection depends on presumptive tax regime which also means that tax collecting machinery contributes very little towards collection of revenue.

The Southern Region also surpassed the revenue collection target fixed by the CBR along with tax returns for the first half of the FY07. It collected Rs5.782 billion or 4.23 per cent more revenue along with returns against the target of Rs5.546 billion.

A target of Rs38 billion for the current fiscal has been fixed for the Southern Region which covers Medium Taxpayer Unit (MUT), Karachi, MTU Quetta, Sukkur Zone and Hyderabad zone.