ISLAMABAD: The withholding tax (WHT) collection stood at Rs 1,534.4 billion during 2021-22 against Rs 1,237.3 billion in 2020-21, indicating a growth of 24 percent.
Accordion to FBR’s report on 2021-22 performance, with the exception of WHT on technical fee all other major items recorded positive growth. The WHT from exports recorded the highest growth of around 54 percent in collection, followed by electricity, immovable property and dividends with 39.3 percent, 31.9 percent and 30.6 percent respectively.
The high number of withholding provisions adds to complexity and creates undue burden of compliance on different withholding agents. In an effort, to augment ease of business and simplifying the tax laws numerous sections of Income Tax Ordinance 2001 like; 153B, 23IA, 23IAA, 236P, 236Y, 236B, 236L, 236V, 233A have already been omitted, FBR said.
The highest contributor in withholding taxes is the withholding tax on contract payments with 22.2 percent share, followed by imports (18.3 percent) and salary (12.9 percent) during 2021-22.
The report revealed that significant efforts were made during 2021-22 to enhance the collection from Collection on Demand (CoD). During 2021-22, overall collection from CoD stood at Rs.101.1 billion against Rs. 80.1 billion collected in PFY showing a growth of 26.1 percent. The recovery from arrear demand has shown a substantial growth of around 54 percent, whereas current demand increased by 15 percent.
The data revealed that an amount of Rs. 665.4 billion has been collected during 2021-22 as compared to Rs 465.8 billion in 2020-21 under the heads of payments made with returns and advance income tax collection. Major contribution has come from Advance Tax collection with Rs 586.9 billion against Rs. 411.7 billion in 2020-21, registering a growth of 42.5 percent. Under the head payments with returns, Rs 78.5 billion has been collected during 2021-22 against Rs 54.1 billion in 2020-21, showing a growth of 45.2 percent.
Copyright Business Recorder, 2022