KARACHI: Revenue collection authorities have managed to force around 15,000 shopkeepers to file their annual income tax returns for tax year 2020 by indentifying small retailers, who had been earning taxable income over the past many years.
The Regional Tax Office (RTO) Karachi conducted an extensive exercise to identify small retailers with taxable income and asked them to get registered with the income tax authorities besides file their annual declaration of income and assets.
A senior official at the RTO Karachi said that the tax office had conducted surveys of various markets located in the city including Saddar, Clifton, and Defence.
The official said the surveys were conducted early this fiscal year and notices were served to the shopkeepers to make compliance.
“The pace of return filing was slow till September 2020. However, this process gets momentum in October-December 2020,” the official added.
Due to these efforts of RTO Karachi, income tax collection along with returns jumped up by 51 percent to Rs2.75 billion during the first half (July-December) of current fiscal year as compared with Rs1.8 billion in the corresponding half of the last fiscal year.
However, the collection with returns registered an unprecedented growth of 300 percent to Rs1.66 billion in December 2020 as compared with Rs418 million in the same month of the last year.
The official said these shopkeepers were other than Tier-I retailers. The Tier-1 retailers have different requirements of obtaining registration under both sales tax and income tax laws.
Persons having taxable income are required to get income tax registration under Section 181 of the Income Tax Ordinance, 2001. Further under Section 181C of the Ordinance every person deriving income from business chargeable to tax, who has been issued a NTN, should display his NTN at the conspicuous place of his business.
RTO Karachi also forced persons, who were making taxable supplies to get sales tax registration. The official said that under this exercise over 1,000 shopkeepers obtained their sales tax registration number (STRN).
The official said that RTO Karachi was in process to bring more shopkeepers into the tax net as a large number of notices had been served for compliance. “The tax office will initiate penal action against persons who fail to get registration and file their annual income tax returns,” the official added.
Source: The News