ISLAMABAD – During July-December 2014-15 period, withholding tax collections advanced by 23 percent versus 19 percent growth in the corresponding period of last fiscal year.
The Federal Board of Revenue has shown a phenomenal growth in collection of withholding taxes from non-filers in specific categories whereas growth is below the mark in others, they added. For example, withholding tax collection has shown extraordinary growth on purchase of new cars (section 231B) during first half of 2014-15. The withholding tax collection on dividend and profit on debt is also satisfactory. However, the expected increase has not been seen on property transactions, cash withdrawals, and marriage halls despite higher rates of withholding taxes from non-filers of returns during the period under review.
An expert said, “Growth in withholding taxes is due to an overall increase in withholding tax rates in 2014-15 budget and the component of increased rates for non-filers, designed to enhance documentation, is negligible in the overall collection.”
He said the hike in basic withholding tax rates on almost every category of taxpayers resulted in overall growth of withholding tax collections during first half of 2014-15. The impact of withholding tax collection from non-compliant taxpayers is not very much.
A legal expert said that FBR cannot bifurcate between tax deposited by filers and non-filers on cash withdrawals as banks are providing consolidated data of tax deduced/deposited to the FBR.
