FAISALABAD:
The Faisalabad Regional Tax Office (RTO) has stepped up efforts to broaden the tax base by targeting retailers, wholesalers, distributors and traders, amid slowing export-related collections and stagnant import tax revenue, officials said.
RTO Chief Commissioner Dr Shah Khan, speaking to media representatives, said the authority was striving to achieve 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 started to impact trade flows, with export-related collections and import-related taxes showing a notable slowdown from the second week of April.
He pointed out that the full trade cycle affects tax collection with a delay of almost 45 days to two months, and the current slowdown is now reflected in withholding taxes, sales tax, import income tax and export-related tax flows.
Dr Shah Khan said the import and export sectors were previously growing at 15-20 per cent, but this momentum has now stalled, putting pressure on revenue targets.
He added that in response, the tax authority is focusing on alternative sources of revenue, including closing audits, recovery of unpaid dues, inventory exercises and increasing field visits to sectors such as textiles, processing units, hospitals and marquees.
He said Faisalabad’s average monthly tax collection stands at around Rs 14 billion, of which almost 60 per cent comes from income tax, including domestic and import-related sources, while the rest comes from sales tax and federal excise duties.
However, he noted that large industries such as sugar and cement contribute their taxes to other jurisdictions due to locations of production, which affects local figures.
Dr Shah Khan also highlighted issues of underinvoicing and misrepresentation in the textile and processing sectors, saying that field teams are actively monitoring discrepancies between declared data and actual raw material usage.
He said enforcement teams regularly conduct inspections and audits to combat tax evasion and ensure compliance.
On widening the tax net, the chief commissioner said the department uses 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 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 contributors into the system,” he said.
