KARACHI: The Federal Board of Revenue (FBR) collected Rs9.34 billion worth of withholding tax through non-cash banking transactions by non-filers during the first 10 months of the current fiscal year of 2017-18, which is 11 percent to less than the collection of previous fiscal year.
Official data showed that withholding tax collection from non-cash banking transactions fell from Rs10.46 billion in the corresponding period of the last fiscal year.
The FBR collects withholding tax rate at 0.4 percent under Section 236P of Income Tax Ordinance, 2001 from non-filers of income tax returns. The government introduced the provision, through Finance Act 2015, to compel people having taxable income to declare their income and wealth statements. Withholding tax rate was fixed at 0.6 percent on cash transactions above Rs50,000/day. The rate was, however, reduced to 0.3 percent soon after the introduction. The rate was inched up to 0.4 percent in May, which is applicable till June 30.
Officials at Large Taxpayers Unit (LTU) Karachi said there has been a significant increase in returns filing after the government extended the scope of withholding tax on banking transactions.
The filing of annual income tax returns increased to 1.4 million as per the active taxpayers list (ATL) 2017, updated up to May 20. The returns filing surged 22 percent from 1.15 million recorded till the same day a year ago.
An estimate said annual sales of domestic and imported vehicles stand at around 350,000 units, while transactions of around 600,000 to 700,000 properties take place a year.
