ISLAMABAD: The Federal Board of Revenue (FBR) has collected Rs422 million in advance tax on foreign transactions made through credit and debit cards during the first five months of the current fiscal year.
Official data showed that collection under this head was a meagre Rs16.8 million during July–November of the last fiscal year.
Banks collected one percent advance tax when any sum is remitted outside Pakistan on behalf of a person who has completed a credit or debit card transaction, or a prepaid card transaction with a person outside Pakistan.
However, this advance tax is adjustable against the tax liability of a person making transactions under this head.
Regional Tax Office (RTO)-II Karachi collects the advance tax under this head from banks having head offices located in Karachi. The advance tax on foreign transfers through debit or credit cards was introduced in fiscal year 2018/2019. However, the collection was very nominal throughout the year.
The significant growth has been attributed to monitoring and enforcement of relevant law. The growth has also been attributed to rising payment for purchases using internet platform.
A senior official of Federal Board of Revenue (FBR) said the tax authorities had enhanced the monitoring of tax deduction realising the fact that shopping through foreign web portals was rising.
The official said the one percent tax rate was applicable on the persons filing their annual tax returns by due date and appearing on the Active Taxpayers List (ATL). However, this rate was double for the persons not appearing on the ATL.
The total tax collection under this head was Rs991.4 million during fiscal year 2018/2019. The official said the FBR would conduct scrutiny of transactions to identify persons making transactions. In this regard banks will provide the details of persons making transactions through debit and credit cards through their half-yearly withholding statement.
SAARC chief urges turning South Asia’s challenges into opportunities
ISLAMABAD: President of the SAARC Chamber of Commerce and Industry, Chandi Raj Dhakal, has emphasized that South Asia’s economic and...
