Rs25m tax collected from two five-star hotels
The Islamabad Excise and Taxation Department has collected a huge amount of Bed Tax, a government levy imposed on lodging facilities, this year.
“Approximately Rs25 million are being collected from two five-star hotels in the city every month,” the department’s director, Bilal Azam, told SAMAA Digital. “A couple of years back, we were just collecting between Rs300,000 and Rs400,000 every year.”
He lauded the management of the hotels and remarked that their tax payment systems matched international standards.
The bed tax is solely recovered by the local excise and taxation department and does not include taxes collected from hotels by the Federal Board of Revenue.
The levy is applied on 5% of the invoice and excludes sales and other applicable taxes. It is charged from hotels and lodging facilities in Islamabad that have over 25 lodging units.
According to Azam, measures are being taken to improve bed tax collection from all lodging facilities in the city.
For this purpose, the taxation department is working on a plan to provide an interface, connected to the government’s tax collection system, to each hotel and lodging.
“We are bringing a system through which bed tax will be collected on the spot as soon as the entry of a guest at a hotel/lodging facility is made in the system.”
The director said that once this is done, there will be no need for inspectors to visit these facilities to manually oversee the volume of lodgers for taxation purposes. The department’s field staff regularly conducts surveys regarding the collection of professional tax and bed tax across Islamabad, he added.
In order to bring the business/profession levy under the tax net, the department has planned to integrate its data with the Security and Exchange Commission of Pakistan. As soon as a company gets registered with the SECP, it automatically gets intimated in the department’s system.
The Excise and Taxation Department has initiated a crackdown against tobacco under the Tobacco Control Act, 1958, as well. So far, 1,300 notices have been issued to defaulters and illegal sellers of tobacco in the city.