AGL 23.81 Decreased By ▼ -0.54 (-2.22%)
AIRLINK 103.60 Increased By ▲ 0.60 (0.58%)
BOP 5.66 Decreased By ▼ -0.05 (-0.88%)
CNERGY 3.93 Decreased By ▼ -0.03 (-0.76%)
DCL 8.36 Decreased By ▼ -0.14 (-1.65%)
DFML 41.70 Decreased By ▼ -1.29 (-3%)
DGKC 88.30 Decreased By ▼ -0.60 (-0.67%)
FCCL 22.70 No Change ▼ 0.00 (0%)
FFBL 40.88 Increased By ▲ 2.68 (7.02%)
FFL 8.96 Decreased By ▼ -0.15 (-1.65%)
HUBC 160.49 Decreased By ▼ -3.21 (-1.96%)
HUMNL 11.46 Decreased By ▼ -0.34 (-2.88%)
KEL 4.82 Decreased By ▼ -0.03 (-0.62%)
KOSM 4.09 Decreased By ▼ -0.04 (-0.97%)
MLCF 38.60 Increased By ▲ 0.19 (0.49%)
NBP 53.60 Increased By ▲ 0.75 (1.42%)
OGDC 130.60 Decreased By ▼ -2.29 (-1.72%)
PAEL 25.36 Decreased By ▼ -0.29 (-1.13%)
PIBTL 6.25 Decreased By ▼ -0.13 (-2.04%)
PPL 118.90 Decreased By ▼ -0.60 (-0.5%)
PRL 23.95 Decreased By ▼ -0.65 (-2.64%)
PTC 12.92 Increased By ▲ 0.28 (2.22%)
SEARL 59.11 Decreased By ▼ -0.49 (-0.82%)
TELE 7.43 Decreased By ▼ -0.06 (-0.8%)
TOMCL 34.99 Decreased By ▼ -0.16 (-0.46%)
TPLP 8.72 Decreased By ▼ -0.13 (-1.47%)
TREET 15.90 Increased By ▲ 0.10 (0.63%)
TRG 55.95 Decreased By ▼ -1.95 (-3.37%)
UNITY 34.95 Increased By ▲ 0.06 (0.17%)
WTL 1.20 Decreased By ▼ -0.02 (-1.64%)
BR100 8,536 Decreased By -8.5 (-0.1%)
BR30 27,187 Decreased By -204 (-0.74%)
KSE100 79,944 Decreased By -48.3 (-0.06%)
KSE30 25,500 Decreased By -43.9 (-0.17%)

ISLAMABAD: The government is considering a recommendation of the Reforms & Revenue Mobilization Commission (RRMC) to abolish multiple withholding taxes on the wholesale and retail sector in coming budget (2023-24).

The RRMC has recommended the Ministry of Finance that multiple rates of tax under sections 236G, 236H, 153 and 113 of the Income Tax Ordinance 2001 applicable to the wholesale and retail sector should be abolished.

Tax withholding under sections 236G and H should be applicable across the board on all types of goods/ sectors, with lower rates for active and higher rates for non-active taxpayers. Such withholding on the purchases side of wholesale and retail sector should be minimum tax.

Rs550bn tax gap largely falls in five sectors: FBR

Manufacturer/ commercial importer shall provide complete details of buyer (Name/ CNIC/ NTN/ Address) in their sales tax return, as well as, withholding statement; otherwise, proportionate income tax and input tax shall be disallowed to such manufacturers/ commercial importers; likewise wholesalers/ distributors/ dealers should also provide complete details of their buyers (retailers) in their sales tax return and withholding statements they will file under section 236H; otherwise, proportionate income tax and input tax shall be disallowed.

The RRMC has also recommended increasing the rate of tax under section 148 for commercial imports from 5.5% to 8% and 3.5% to 5.5% in case of commercial importers.

The rate of withholding tax for service sector across the board and contractors should be same as different/ varying rates are creating distortions. To make the overall impact of this proposal tax neutral a detailed exercise is required.

The Minimum tax regime should be revamped/ withdrawn gradually as it is a distortion in the system.

Nonetheless until the regime exists, the taxpayers should be allowed to adjust excess of Minimum over their normal tax liability in the subsequent years subject to certain conditions explained in our detailed comments.

The revenue impact will be neutral immediately and positive for future if conditions attached for allowing the tax credits are complied with, RRMC added.

Copyright Business Recorder, 2023

Comments

Comments are closed.

Tulukan Mairandi May 25, 2023 11:32am
They will never do it. Because they will have to release huge amounts of people's funds withheld
thumb_up Recommended (0)
abid azhar May 25, 2023 02:41pm
Think before you speak
thumb_up Recommended (0)