ISLAMABAD: President Mamnoon Hussain has signed an ordinance to halve the withholding tax rate valued at over Rs50,000 for a period of three months after the approval of Prime Minister Nawaz Sharif.
Finance Minister Ishaq Dar had earlier sought clearance on the move from PM Nawaz, who promptly sent his advice to President Mamnoon.
The ordinance is issued to give partial effect to a five-point agreement that the federal govt and business community signed on Thursday.
After its promulgation, the rate of withholding tax on all banking transactions valued at over Rs50,000 is reduced from 0.6% to 0.3% with effect from July 11. The transaction tax is only applicable on non-filers.
Dar apprised the PM Nawaz about the agreement reached with traders’ associations and members of the business community regarding adjustment in withholding tax from 0.6% to 0.3% and other Federal Board of Revenue (FBR) related matters, said an official handout.
The 0.6% tax, levied with effect from July 1, was aimed at collecting Rs35 billion in taxes during the current fiscal year. At present, there are less than 880,000 income tax return filers in the country – a figure that is now expected to go up significantly.
