Ultimate magazine theme for WordPress.

FBR directs banks to collect 0.6pc advance tax from non-filers

939

KARACHI: Federal Board of Revenue (FBR) has asked banks to collect withholding tax at the rate of 0.6 per cent on non-cash transactions above Rs50,000 per day made by non-filers of income tax returns.

The FBR issued directives to the financial institutions after approval of Finance (Supplementary) Act, 2018 by the National Assembly.

Sources in FBR told PkRevenue.com that the rate has been implemented from approval of the bill by the national assembly i.e. October 03, 2018.

The previous government in the budget 2018/2019 fixed this tax rate at 0.4 percent from 0.6 percent.

The government introduced Section 236P to Income Tax Ordinance, 2001 through Finance Act 2015 and imposed 0.6 percent advance tax on transactions above Rs50,000 per day made by non-filers in order to increase the cost for non-compliant taxpayers.

However, this move of the government was strongly opposed by trade and business and compelled the government to reduce the rate at 3 percent. The reduced rate, however, increased to 0.4 percent, which was remained implemented till June 30, 2018. But the PML-N government in its last budget announced to continue this rate from July 01, 2018 onwards by amending the law.

The PTI government on September 18, 2018 through Finance (Supplementary) Bill, 2018 proposed to enhance the withholding tax rate on non-cash banking transactions by non-filers to 0.6 percent, which was approved by the national assembly and this rate become part of statute.

The sources said that the rate of withholding tax on cash withdrawal is already 0.6 percent for non-filers.

They said that there is no withholding tax for filers on non-cash transactions. But the rate of 0.3 percent on cash withdrawal is implemented on filers.

Advertisements

Leave A Reply

Your email address will not be published.