To provide relief to goods transporters, the Federal Board of Revenue has agreed to reduce the rate of withholding tax on goods transport vehicles from Rs 3 per kg to Rs 2 per kg of the laden weight. Sources told Business Recorder here on Monday that the FBR has accepted the demand of the goods transporters. The rate of withholding tax on goods transport vehicles under Section 234 of the Income Tax Ordinance, 2001 would be reduced from Rs 3 per kg of the laden weight to Rs 2 per kg.
Earlier, the rate was reduced from Rs 5 per kg of the laden weight to Rs 3 per kg. Now a uniform rate of withholding tax would be applicable on goods transporters and oil tankers. It has also been decided that the rate of tax on cargo contractors' services be increased from 2 percent to 2.5 percent.
The tax authorities are hopeful that the goods transporters would end their strike following announcement of reduction in withholding tax from Rs 3 per kg of the laden weight to Rs 2 per kg. However, the FBR will move a summary to Finance Minister Ishaq Dar for formal approval. Following clearance from the Ministry of Finance, the FBR will issue a necessary notification.