KARACHI: The withholding tax (WHT) collection from non-filers by the Federal Board of Revenue (FBR) has decreased by 8.5 per cent to Rs3.76 billion during the first four months of the current fiscal year.
The FBR collected Rs4.12 billion in withholding tax from non-filers’ banking transactions in the July-Oct period of 2015/16.
According to an official, property transactions came almost to halt following the changes in the valuation laws. “Major banking transactions were made in the property business in the past and most of the transactions were made by non-filers,” he added.
The officials said a score of investors preferred the informal channel to avoid the tax registration and additional tax bar. The government, through Finance Act 2015, introduced a new section 236P into Income Tax Ordinance, 2001 under which a non-filer of income tax was required to pay 0.6 percent withholding tax on an amount of Rs50,000 in case of a bank transfer. However, the rate was reduced to 0.3 percent and maintained at this level for a long time. In March, the rate was increased to 0.4 percent till December 31.
The tax officials said tax return filing increased over the year and individuals got themselves registered with the authority to avoid the additional tax payment. “Around 35,000 tax returns were received for the tax year 2015,” the FBR official said.
