The reduction in rate of withholding tax on electricity bills of commercial and industrial consumers exceeding Rs 20,000 per month from 10 to 5 percent has benefited over 6,600 taxpayers during 2010-11. According to the FBR latest quarterly review, the share of withholding tax in gross collection has gone up to 66 percent in first quarter of 2010-11 from 65 percent in first quarter of 2009-10.
Among these sources, significant growth of 31.9 percent in collection has been recorded in dividends, mainly due to increase in the profitability of the business in the country. Similarly, around 30 percent growth was recorded in WHT on salaries. The reason of higher growth in the collection from salaries has been due to 50 percent increase in the salaries of the government employees with effect from July, 2010.
Likewise 31.8 percent growth has been recorded in the collection under the head of import mainly due to enhancement of WHT on commercial import from 4 percent to 5 percent during current fiscal. The growths of 21.4 percent and 20.5 percent were also recorded in case of export and bank interest respectively. The bank interest rate has been increased by the government during the period under review.
Within WHT, the major share in the collection has been from major sources, namely, contracts/supplies (29 percent), imports (23 percent), salary (16 percent) telephone (10 percent), and bank interest/securities (8 percent), the FBR report added.
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