The major revenue spinners of withholding tax (WHT) during first half of 2009-10 were contracts and supplies, imports, salaries, telephone, exports, bank interest, electricity, cash withdrawals and dividends. The FBR quarterly review, issued on Saturday, showed that withholding tax was the third important component of income tax.
During first half 09-10, taxes worth Rs 133.9 billion were collected, against Rs 112.8 billion in the corresponding period of last year, reflecting a significant growth of 18.7 percent. The share of WHT in gross income tax collection increased during the period under review to 65.5 percent, against 54.6 percent in first half of 08-09.
The major heads contributed 94.5 percent of total WHT collection. Their respective shares are shown in Graph 4. The major share of WHT came from contracts and supplies (31.4 percent), followed by trade related deductions 23.3 percent [imports 17.4 percent, and exports 5.9 percent], salaries 10.7 percent, and telephone bills 8.0 percent, and so on.
A healthy performance in receipts on account of contracts, telephone use, salary payments, electricity bills, cash withdrawals and dividend was witnessed during this period. On the other hand, there was a decline in WHT on imports and exports, which appeared to be inconsistent with 14.1 percent and 3.8 percent growth in imports and exports respectively during first half of 08-09. Finally, 86 percent increase in deductions on cash withdrawal vindicated the assertion that the undocumented economy requires special tax treatment.
Comments
Comments are closed.