KARACHI: Federal Board of Revenue (FBR) collected Rs7.72 billion under the head of non-cash banking transactions during July-February of fiscal year 2017 as compared to Rs8.04 billion it collected in the same period of the last fiscal year, showing a decline of four percent.
During the corresponding period, non-cash banking transactions by non-filers of income tax returns sharply dropped 28.5 percent to Rs193 billion. Non-cash banking transactions by non-filers, falling under an extended scope of withholding tax rate, amounted to Rs270 billion in the July-February period of 2015-16.
The government, through Finance Act 2015, introduced a new section 236P into Income Tax Ordinance 2001 under which a 0.6 percent withholding tax rate was imposed on a non-cash banking transaction above Rs50,000 by the non-filer. The measure was taken to encourage filing of annual income tax returns and documentation.
The State Bank of Pakistan (SBP), in its annual report 2015-16 on state of Pakistan’s economy, said the use of cash would further increase due to imposition of withholding tax on non-cash banking transactions.
