ISLAMABAD: The withholding tax collection from salary witnessed a sharp decline from Rs 23,723 million during first half of 2011-12 to Rs 21,451 million in July-December of 2012-13, reflecting a decline of 9.6 percent. As per FBR's report issued on Tuesday, the decline witnessed in withholding tax (WHT) on salary is due to the reason that basic exemption limit was enhanced from Rs 350,000 to Rs 400,000 and the rate for each slab was reduced in the Budget FY: 2012-13.
The shifting of major services, including telecom, from federal to provinces also affected the collection adversely. Furthermore, advances taken in previous fiscal were accounted for in the current fiscal. The growth in the collection from dividends was very low due to less declaration of dividends by the companies for recession in the economy.
Withholding tax is the third important component of income tax. During first half of 2012-13, tax receipts worth Rs 190 billion have been collected against Rs 186 billion collected in the corresponding period of last year entailing a growth of just 2 percent. The share of WHT in gross income tax collection remained 55 percent during the period under review.
The major revenue spinners of WHT are: contracts/supplies, imports, salary, telephone, exports, bank interest, electricity, cash withdrawals and dividends. The major heads depicted in Table 5 contribute 91.4 percent of total WHT collection. The share of contracts was 26.1 percent followed by imports (23.4 percent), salary (11.3 percent), bank interest (8.4 percent) telephone bills (4.9 percent) and exports (5.7 percent), the report added.
Comments
Comments are closed.