Cash withdrawals from banks: WHT collection saw major decline

RECORDER REPORT

ISLAMABAD: There has been a major decline in withholding tax (WHT) collection on cash withdrawals from banks during first half of current fiscal year due to rate reduction in the Budget 2011-12.

According to the FBR quarterly report issued here on Friday, the withholding tax is the third important component of income tax. During first half of the 2011-12, tax receipts worth Rs.186 billion have been collected against Rs. 151.3 billion collected in the corresponding period of last year entailing a significant growth of 23%. The share of WHT in gross income tax collection remained 50% during the period under review.

The major revenue spinners of WHT are: contracts/supplies, imports, salary, telephone, exports, bank interest, electricity, cash withdrawals and dividends. The major heads contribute 92.3% of total WHT collection. The major share of WHT comes from contracts (24%) followed by imports (22%), salary (13%), telephone bills and bank interest (8%) each and exports (6%).

A healthy performance in receipts on account of dividends, salary payments, imports, exports, and telephone and bank interest has been witnessed during first half of the 2011-12. On the other hand, there has been a decline in WHT on cash withdrawals due to rate reduction in the Budget 2011-12.