Non-filers’ transaction cost increased through 12 withholding tax provisions

fbr

ISLAMABAD: Federal Board of Revenue (FBR) has increased the cost of transactions for non-filers of income tax return by enhancing withholding tax rates in 12 different provisions of Income Tax Ordinance, 2001.
The FBR issued Circular No.04 of 2017 to explain the major changes in budget 2017/2018 brought through Finance Act, 2017. The FBR said that continuing with its policy of increasing the cost of doing business for non-filers, withholding tax rates had been increased for non-filers across a multitude of transactions through the Finance Act, 2017.
The enhanced rates for non-filers introduced as under:
Section152(1A): The withholding tax rate has been enhanced to 13 percent from 12 percent against (1) payments to non-residents on execution of a contract of a contract under a construction, assembly or installation project, (2) Any contract for construction or services rendered relating thereto, and (3) Any contract for advertisement services rendered by TV satellite channels.
Section 152(2A)(a): The withholding tax rate has been enhanced to 7 percent from six percent in case of company and to 7.75 percent from 6.5 percent in case of non-company against payments to permanent establishment of a non-resident for the sale of goods.
Section 152(2A)( b): The withholding tax rate has been increased to 14 percent from 12 percent in case of company and to 17.5 percent from 15 percent in case non-company against payments to permanent establishment of a non-resident for rendering services.
Section 152(2A)(c): The withholding tax rate has been enhanced to 13 percent from 12 percent against payments to permanent establishment of a non-resident for the execution of a contract.
Section 153(1)(a): The withholding tax rate has been enhanced to 7 percent from 6 percent in case of a company and to 7.75 percent from 6.5 percent in case of a non-company against payments for sale of goods.
Section 153(1)(b): The withholding tax rate has been enhanced to 14.5 percent from 12 percent in case of a company and to 17.5 percent from 15 percent in case of a non-company against payments for rendering of services.
Section 153(1)(c): The withholding tax rate has been enhanced to 12 percent from 10 percent in case of a company as to 12.5 percent from 10 percent in case of a non-company against payment for contracts.
Section 155: The withholding tax rate has been enhanced to 17.5 percent of gross rent from 15 percent of gross rent against payment for rent by a company.
Section 156: The withholding tax rate has been enhanced to 25 percent from 20 percent against prize on prize bond or crossword puzzle.
Section 156A: The withholding tax rate has been enhanced to17.5 percent from 15 percent against commission/discount to a petrol pump operator.
Section 234A: The withholding tax rate has been enhanced to 6 percent from 4 percent against gas bill of a CNG station.
Section 236A: The withholding tax rate has been enhanced to 15 percent from 10 percent on sale by auction.

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