Pakistan Business Council (PBC) has suggested a higher withholding tax for non-filers in the upcoming budget for the fiscal year 2018-19.
PBC submitted its recommendations report to the Federal Board of Revenue specifying the incentives for filers. The Council’s report further added that Pakistan needs to document its economy as well. The report recommended increasing the efforts to document the economy through the data collected by FBR.
The Council appreciated the government’s move of increased WHT for non-filers. However, they in their report recommended that the WHT for non-filers should be at least three times more than that for filers.
The increased withholding tax rate for non-filers will provide clear incentives to those who file their returns. It will further encourage the non-filers to file their tax returns as well.
The report also added that FBR can increase the tax base and determine WHT for non-filers by collecting data from different sources. This includes data from the real estate sector and NARDA that will help in documenting the transactions involving property transfers.
The real estate sector is a mega-market that goes overlooked while computing the taxes. FBR can significantly increase the revenue base by documenting and taxing this sector, the report recommended.
According to the reports, the Federal Budget for Financial Year 2018-19 is expected to be presented on April 27. The government recently announced to significantly cut income tax rates as well. However, experts are predicting that this will decrease the already narrow tax base of Pakistan and will result in Rs 90 billion annual loss to the economy.
The government, on the other hand, is hoping to increase the tax base through the amnesty scheme that it announced recently.
Via Pk Revenue