The government is planning to abolish a number of withholding taxes in the budget (2019-20). Sources told Business Recorder here on Wednesday that the Federal Board of Revenue (FBR) has proposed to retain major withholding taxes, which are contributing to revenue generation in a meaningful manner. Major revenue spinners of withholding taxes would be retained in the budget.
The withholding taxes which are used for the broadening the tax base or discouraging non-filers would also be retained in coming budget. However, those withholding taxes which are contributing only a meager amount to the national kitty would be abolished. The FBR is reviewing the Income Tax Ordinance 2001 for abolition of the withholding taxes in coming budget. The number may be between 7-15, depending on their contribution in revenue collection.
The WHT collection during 2017-18 was Rs. 1047 billion against Rs. 944 billion indicating a growth of around 10.9%. The nine major components of withholding taxes that contributed around 87% to the total WHT collection in 2017-18 were: contracts, imports, salary, telephone, dividends, bank interest, cash withdrawal, electricity and exports. As far as growth is concerned, collection from salary grew by around 20%, contracts (9.1%), dividends (16.9%), imports (11%), cash withdrawal (11.5%) and electricity (30.9%) during 2017-18.
Comments
Comments are closed.