Banking transactions tax halved till Sept 30

Source: Published in Business & Economy on Friday, July 10, 2015

ISLAMABAD: The Federal Board of Revenue and members of the business community reached an agreement on Thursday to reduce withholding tax to 0.3 per cent from 0.6pc on banking transactions for non-filers of income tax returns.

The new rate will be in force till Sept 30 – the last date for filing income tax returns for the tax year 2015.

The agreement on four issues was reached at a meeting of the 19-member committee constituted by Finance Minister Ishaq Dar on Wednesday.

The finance minister told journalists that the reduced rate would expire on Sept 30 and from Oct 1 the original rate of 0.6pc would be charged.

The meeting urged the non-filers to file returns before the deadline. Under the agreement, the list of filers will be updated every 24 hours.

The tax does not apply to filers of income tax returns.

Finance Minister Dar said the decision about 0.6pc withholding tax was part of the financial bill. For any relaxation in it, the matter has to be taken to parliament. The tax is part of the major drive to broaden the tax base.

The minister said that first a presidential ordinance would be issued and then the matter would be taken up by parliament.

A source privy to the meeting told Dawn that the business community had sought time for filing income tax returns. “We want to file returns but give us some time,” the source quoted representatives of the business community as having said at the meeting.

The finance minister also said that an extension of schedule-III of the Sales Tax Act 1990 would be considered on a sector-to-sector basis for sales tax by the FBR and representatives of the business community.

The schedule-III includes items on which sales tax is charged on the printed retail price. Both sides agreed to include fresh items in the list after consultations.

The issue of turnover tax of income tax would be decided for various trades and sectors in consultations with the business community and the FBR.

The finance minister said the 19-member committee would work on the issues and hopefully finalise its recommendations by the end of August. He said the FBR and the business community would hold further talks to resolve all issues related to filing of income tax returns.

Mr Dar praised the committee for reaching the agreement and the business community for its contribution to the national exchequer. He said he had always called for a charter of economy and still advocated the idea for economic wellbeing of the country.

Representatives of the business community praised the government for resolving the issue of withholding tax on banking transactions and other FBR-related matters.

The meeting was attended by Special Assistance to the Prime Minister on Revenue Haroon Akhtar, FBR Chairman Tariq Bajwa, Anjuman Tajiran President Naeem Meer, FPCCI President Mian Idress, Karachi Chamber of Commerce and Industry President Iftikahr A. Vohra, Rawalpindi Chamber of Commerce and Industry President Syed Asad Mashadi, Pakhtunkhwa Chamber of Commerce President Fuad Ishaq, Islamabad Chamber of Commerce President Muzammil Hussain Sabri, Mian Abdul Mannan, Pervez Malik and other leaders of the community.

Author Information

Written by Mubarak Zeb Khan

More by Mubarak Zeb Khan
Read all from Mubarak Zeb Khan»

People Mentioned
  • Muhammad Ishaq Dar Federal Minister for Finance, Revenue, Economic Affairs and Statistics