ISLAMABAD: The collection of withholding tax has sharply declined by 52 percent during tax year 2020 as the tax was abolished under this head for filers of income tax returns.
According to official statistics released by the Federal Board of Revenue (FBR) for tax year 2020, the collection of withholding tax from cash withdrawal fell to Rs15 billion in 2019/2020 as compared with Rs31.75 billion in the preceding fiscal year.
The FBR said that the collection from cash withdrawals decreased due to abolishment of tax under this head for filers.
The FBR analyzed collection from 10 major revenue spinners of withholding taxes, which are as follow:
- The collection of withholding tax from contracts registered growth 1.2 percent to Rs237.5 billion during fiscal year 2019/2020 as compared with Rs235 billion in the preceding fiscal year.
- The collection of advance tax at import stage was at Rs199.7 billion during fiscal year 2019/2020 as compared with Rs222 billion in the preceding fiscal year, showing a decline of 10 percent.
- A significant growth of 69 percent has been recorded in collection of withholding tax from salary persons. The FBR collected Rs129 billion under this head during 2019/2020 as compared with Rs76.4 billion in the preceding fiscal year.
- The collection of withholding tax from bank interest and securities was at Rs128 billion in fiscal year 2019/2020 as compared with Rs58 billion in the preceding fiscal year, showing an increase of 120 percent.
- The withholding tax collection from dividends fell by 3.7 percent to Rs55 billion during fiscal year 2019/2020 as compared with Rs57 billion in the preceding fiscal year.
- The collection of withholding tax from telephone registered massive growth of 218 percent to Rs54.6 billion as compared with Rs17 billion in preceding fiscal year.
- The FBR collected Rs45.42 billion as withholding tax from electricity consumers during fiscal year 2019/2020, which was 28 percent higher when compared with Rs35.6 billion in the preceding fiscal year.
- The collection of withholding tax from technical fee was Rs40.2 billion during fiscal year 2019/2020 as compared with Rs40 billion.
- The withholding tax collection from exports witnessed a growth of 12 percent to Rs38.4 billion during fiscal year 2019/2020 as compared with Rs34.5 billion in the preceding fiscal year.
- The collection of withholding tax from banking cash withdrawal fell by 52 percent to Rs15.2 billion during fiscal year 2019/2020 as compared with Rs31.75 billion in the preceding fiscal year.
The collection of withholding tax from 10 major revenue spinners was at Rs944 billion during fiscal year 2019/2020 as compared with Rs807 billion, showing an increase of 17 percent.
The overall collection of withholding tax was Rs1,092 billion during fiscal year 2019/2020 as compared with Rs960 billion, showing growth of 13.7 percent. Therefore, the share of top 10 major revenue spinners of withholding taxes was 86.4 percent in 2019/2020 which was 84.1 percent in the preceding fiscal year.
