Rs 4 billion withholding tax recovered on cheques in 2006-07: Senate body told

The Central Board of Revenue (CBR) collected Rs 4 billion withholding tax on cash withdrawals from banks during 2006-07. CBR Chairman Abdullah Yusuf told Senate standing committee on finance on Wednesday that undocumented economy has to be regulated through a system for which CBR was currently making efforts.
He said that withholding tax recovered on cash withdrawals could be adjusted/refunded against income tax due against any individual provided he was in the tax net. However, withholding tax recovered from individuals who were not in the tax net would not be refunded.
The committee met at the Parliament House for the second consecutive day under the chairmanship of Ahmad Ali to consider and finalise recommendations on Finance Bill 2007. The committee also considered some proposals from the members regarding micro-credit finance and small loans. They were of the view that the mark-up rates needed to be reviewed and be made "just and rational".
Some of the recommendations were either withdrawn or not pressed by them after CBR chairman briefing regarding rationalisation of the proposed taxation measures. About different stages of income tax on salaried class, CBR Chairman apprised the committee that the whole scheme was rationalised for current year and allowances were made part of salary by considerably reducing the rate of tax.
He said that the present tax regime was more competitive and progressive, when seen in regional context. The meeting was attended by Haroon Khan, Asif Jatoi, Dr Khalid Mehmoud Soomro, Mohammad Amin Dadabhoy, Nisar Ahmad Memon, Mohammad Ishaaq Dar and Khurshid Ahmad besides the Minister of State for Finance Omar Ayub Khan and senior officials of the Ministry of Finance and CBR.