FAISALABAD:
The Regional Tax Office (RTO) Faisalabad has intensified its efforts to broaden the tax base by focusing on retailers, wholesalers, distributors and traders amid a slowdown in export-related collection and stagnation in import tax revenue, officials said.
RTO Chief Commissioner Dr. Shah Khan, while speaking to media representatives, said that the authority is working towards achieving an annual tax collection target of Rs 160 billion by June 2026, despite emerging economic pressures linked to regional geopolitical tensions since end-February 2026.
He said the ongoing conflict between Iran, the United States and Israel has begun to affect trade flows, with export-related tax collections and import-related taxes showing a notable slowdown since the second week of April.
He noted that the entire business cycle affects tax collection with a lag of almost 45 days to two months, and the current slowdown is now reflected in withholding tax, sales tax, import income tax and export-related tax flows.
Dr Shah Khan said that earlier the import and export sectors showed 15% to 20% growth, but this momentum has now stalled, putting pressure on revenue targets.
He added that in response, the tax administration is focusing on alternative revenue sources, including audit closures, recovery of outstanding dues, stock-taking exercises and increased field visits in sectors such as textiles, processing units, hospitals and tents.
He said Faisalabad’s monthly average tax collection amounts to around Rs 14 billion, of which nearly 60% comes from income tax, including domestic and import-related sources, while the rest is contributed through sales tax and federal excise taxes.
However, he highlighted that large industries such as sugar and cement contribute their taxes in other jurisdictions due to production locations, affecting local figures.
Dr Shah Khan also flagged issues of under-invoicing and misdeclaration in the textile and processing sectors, stating that field teams are actively monitoring discrepancies between declared data and actual raw material usage.
He said law enforcement teams regularly conduct inspections and audits to curb tax evasion and ensure compliance.
On widening the tax net, the chief commissioner said the department is using multiple data sources including property records, vehicle registrations, club memberships and tax withholding data under Sections 236G and 236H to identify potential taxpayers.
He said the CNIC-based data is being used to register new taxpayers and enforce filing of returns through notices, after which individuals become part of the formal tax system and are subject to audit.
“Currently, the burden falls disproportionately on existing taxpayers, but the goal is to attract more taxpayers into the system,” he said.
