KARACHI: The Large Taxpayers Office (LTO) Karachi has recovered a record-breaking Rs31 billion in outstanding taxes by freezing the bank accounts of major defaulters.
This significant recovery is part of an intensified drive aimed at enhancing compliance among large taxpayers in Karachi, Pakistan’s financial hub.
According to officials at the Federal Board of Revenue (FBR), the LTO Karachi, which is responsible for handling high-volume and high-value taxpayers, executed the recovery actions over the past few days. The crackdown targeted various corporate entities, including a prominent State-Owned Enterprise (SOE), as well as private sector players across marine, housing, and energy sectors.
Sources revealed that the LTO Karachi resorted to freezing bank accounts after repeated reluctance from companies to fulfill their tax obligations. One notable recovery stemmed from a company’s failure to pay Rs14.5 billion in advance tax due on June 15. In accordance with Section 147 of the Income Tax Ordinance, 2001, the LTO Karachi assessed the company’s turnover and determined the outstanding amount.
After non-compliance, the office directed the company’s banks to debit the required sum from its accounts.
In another case, LTO Karachi recovered Rs12 billion from a different corporate entity using the same account attachment method. Additional recoveries were made from several other companies, all of which had failed to pay advance taxes based on their turnover, as required under Section 147.
Section 147 mandates quarterly advance tax payments on the following schedule:
• September quarter: by September 25
• December quarter: by December 25
• March quarter: by March 25
• June quarter: by June 15
Failure to comply with these deadlines empowers the FBR, through LTO Karachi, to take coercive measures, including account attachments.
Moreover, officials noted that recoveries were also made under Section 137(2) of the Income Tax Ordinance. This provision allows the tax authority to serve a notice for any payable amount under an assessment order. Once the notice is served, the amount must be paid within 30 days.
The Rs31 billion recovery stands as one of the largest in recent years and underscores the determination of LTO Karachi to ensure maximum tax compliance from large corporate taxpayers.
