The major contributors of withholding tax were contracts, imports, salary, telephone, export, bank interest, electricity, dividends and cash withdrawal from banks during July-March, 2010-11. According to the FBR quarterly review issued here on Monday, the withholding taxes contribute 59 percent of the direct tax collection and grew by around 14.6 percent during the period under review.
In fact, the WHT collection during July-March, 2010-11 has been Rs 235.8 billion against Rs 205.6 billion during PFY. The top ten major withholding taxes shared 91 percent of total WHT collection in the current and previous year. The major withholding taxes have generated bulk of the revenues are: contracts, imports, salary, telephone, export, bank interest, electricity, dividends and cash withdrawal.
The tax collection from contracts has been the top revenue-generating source of withholding taxes. Despite substantial cut on the size of public sector development program (PSDP), an amount of Rs 60.5 billion has been collected under the period under review. On the other hand, the collections of WHT from imports have gone up strongly by 26.2 percent due to higher growth trajectory in the value of imports.
As far as collection from salaries is concerned, it grew by around 35.9 percent. The robust growth is mainly due to 50 percent rise in the public sector pay package. Similarly, WHT from export has also exhibited growth of 35.3 percent during July-March 2010-11 due to higher growth of 26.5 percent recorded in the export of the country.
The value of export has increased to 17,779 million US dollars during July-March 2010-11 from 14,072 million US dollar in the corresponding period of last year. The collection from telephones grew by 11 percent during July-March, 2010-11 while the remaining major spinners of withholding taxes exhibited double-digit growths except WHT on electricity where the growth is modest by 1.5 percent, the FBR added.