Supplies by importers: Reduced rate of 1-4pc for purpose of tax withholding likely

ISLAMABAD: The government is planning to introduce a reduced rate of 1-4 percent for the purpose of tax withholding on supplies made by importers in the coming budget (2024-25), it is learnt.

The government may withdraw the exemption of tax withholding on purchases from importers in the budget (2024-25). Presently, there is a tax withholding of 5.5 percent on all sorts of supplies. Exclusion is available to imports since they are already paying advance tax on imports.

Now, the government is likely to withdraw the exclusion and introduce a reduced rate of one percent withholding on supplies made by importers. The said tax withholding will apply to all the purchases made from commercial importers

Sources added that purchases from commercial importers are presently exempt from withholding of tax, and now the Federal Board of Revenue has drafted a proposal for the purpose of income tax withholding.

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Sources added that if the government withholds one percent tax, this measure may generate around Rs 20 billion tax during next year.

Copyright Business Recorder, 2024