Committees on income tax, sales tax and communications constituted by the government to hold a dialogue with business community in the wake of their reservations on withholding tax on bank transactions would submit their proposals in a couple of days, it was learnt.
The committees constituted by Finance Minister Ishaq Dar have held initial meetings and tax authorities maintain that they were able to dispel retailers' and business community's concerns/fears that 0.3 per cent withholding tax on bank transactions would show their actual turnover if higher than Rs 5 million; and consequently they would be forced to register for the sales tax regime.
Tax authorities have informed the business community and retailers that the government has already introduced a new sales tax regime: the old system for retailers was Rs 5 million turnover for mandatory sales tax registration, the new criteria already introduced is air-conditioned malls/chain stores/with monthly electricity bill of over Rs 50,000.
The meeting of income tax committee and communication committee was held on July 31, 2015 and sales tax committee on August, 3, 2015. A brief was also submitted to the standing committee on Finance by the Federal Board of Revenue (FBR) on the issue of withholding tax on non filers wherein tax authorities stated that many rounds of talks were held with the business community in Finance Ministry and FBR; the subsequent agreement was to reduce adjustable advance income tax from 0.6 per cent to 0.3 per cent up to September 30th, 2015.
The government has also decided that in the meantime genuine problems of business community would be resolved. Subsequently, banks were informed that if they had deducted tax @ 0.6 per cent from 13 July 2015 onwards, the excess amount must be refunded/adjusted immediately. The FBR further stated in the brief that the government has taken several measures to bring those outside the tax net into the net and through budget 2014 a new regime was introduced whereby the tax was withheld or collected at a higher rate from those who did not file income tax returns.
The excess tax deducted was advance tax adjustable against tax liability at the time of filing of returns and refundable in case of excess payment of tax. The transactions related to dividend, profit on debt, cash withdrawal from banks, sale to distributors/ dealers, sale and purchase of immovable property, and purchase of motor vehicles as these were included in the new regime. The Finance Act 2015 introduced 0.6 per cent adjustable withholding tax on all bank transactions of more than Rs 50,000/- daily on accounts holders of non-filers.
Comments
Comments are closed.