ISLAMABAD: Federal Finance Minister Ishaq Dar has extended the deadline of Voluntary Tax Compliance Scheme till March 15.
Dar, in the presence of traders, also announced to increase the rate of withholding tax on banking transactions valuing over Rs50,000 from 0.3% to 0.4% to compel the traders to come in the tax net.
The standard withholding tax rate enforced from July was 0.6% that the government halved to appease the traders. During first seven months of the fiscal year, the government collected Rs13.2 billion by charging 0.3% on bank transactions from those who did not come in the tax net.
The government’s decision to extend the last date for filing income tax returns for the current fiscal year for traders and all other segments has resulted in a violation of Income Tax Rules. The government has not yet closed the process of accepting income tax returns for the current fiscal year against the original deadline of September 2015.
Dar refused to give an estimate as to how many of the traders would opt for the scheme in the next 15 days, saying, “I cannot give a number but the representatives of the traders say this time it will be a decent figure.”
Dar said by the last date, less than 2,500 people availed the scheme and paid Rs220 million in taxes. FBR Chairman Nisar Mohammad said that the majority of about 2,200 people were those who filed the income tax returns for the first time.
The FBR collected Rs1,814 billion during first eight months (July-February) of this fiscal year, leaving Rs291 billion balance that it will have to collect in March to meet IMF’s condition for the third quarter of the fiscal year.
