KARACHI, April 25: The Large Taxpayers Unit (LTU) has collected Rs1.155 billion or 8 per cent more in gross income tax up to March 2003. But because of huge refund of Rs2.623 billion, compared to refund of only Rs555 million in the same time last year, total income tax collection decreased by Rs636 million or 6 per cent to Rs10.345 billion against Rs10.981 billion last year.

The huge refund was explained by the LTU as: “It includes refund of Rs1303 million issued by the corporate region, Karachi, in June 2002, and credited to the LTU in July 2002, and a one time major refund of Rs1,004 million issued to the State Life Corporation total amounting to Rs2307 million.”

The LTU has further to claim that if the effect of these payments towards refund totalling up to Rs2,307 million were not taken into account the collection of LTU till March 2003 would have been Rs14,115 million.

The Unit was established last year under the World Bank revamping programme of the CBR and was separated from the corporate region, Karachi. All taxpayers paying up to Rs25 million or more in taxes per annum were enlisted in the LTU. At present around 300 large taxpayers are listed with the LTU.

It is a pilot project of the government. The LTU facilitates large taxpayers by providing collection service of all category of taxes, including sales tax, income tax and central excise duty under one roof.

During the period under review the LTU collected Rs11,808 million in direct taxes, showing a small rise of 3 per cent or Rs350 million over the collection of corresponding period last year, when net collection stood at Rs11,457 million.

The LTU has collected Rs10,345 million on account of income tax compared to Rs10,981 million collected in the corresponding period last year. The collection of workers welfare fund (WWF) stood at Rs1,394 million as against Rs369 million collected in the same period last year. The growth

of up to 278 per cent or Rs1025 million registered in WWF collection is taken by experts as an indicator of higher industrial activity.

The collection of capital value tax, however, declined to Rs68 million from Rs369 million compared to Rs104 million collected in the corresponding period last year.

Though wealth tax had been abolished, some collections on account of arrears and out of settlement of disputes are still coming in, and Rs0.545 million had been realized during the period under review.

The newly established Unit has made higher deductions at source by 12.8 per cent or Rs474 million at Rs4,172 million,as against Rs3,697 million effected in the same period last year.

The cash refunds made by the LTU stood 13 per cent of gross income tax at Rs2,623 million, which stood higher by 373 per cent or Rs2068 million higher than previous year’s refunds made in the same period.