KARACHI: The Federal Board of Revenue (FBR) has advised all the Chief Commissioners of Inland Revenue Service (IRS) to take all measures in reinforcing the existing mechanism of monitoring of withholding tax (WHT).
The directives are to train withholding agents through correspondence and holding of seminars and workshops in this regard.
According to FBR, Finance Act 2014 created a distinction amongst filers and non filers and higher rates of WHT were levied on non filers to increase their cost of doing business.
Accordingly higher rates of WHT were imposed on non-filers in respect of vehicle registration or purchase, dividend, interest, cash withdrawal and purchase and sale of immovable property.
“Filer” means a taxpayer whose name appears in the active taxpayers’ list issued by the board from time to time or is holders of taxpayer’s card while “Non Filer” means a person who is not a filer.
The SRO 136(I)/2015 extended the concept of higher rates for non filers to two more sectors i.e. import and services.
FBR has clarified that in the case of imports, those Industrial undertaking which are neither on Active Taxpayer List nor the holders of taxpayer’s card and are importing remeltable steel (PCT Heading 72.04) and directly reduced iron for its own use will be charged WHT @ 1.5% of the import value as increased by the custom duty, sales tax and FED whereas filers will continue to pay WHT @ 1%.
Those Persons who are importing Potassic Fertilizers in pursuance of Economic Coordination Committee of the Cabinet’s decision and are neither on Active Taxpayer List nor the holders of taxpayer’s card will be charged WHT @ 1.5% of the import value as increased by the custom duty, sales tax and FED whereas filers will continue to pay WHT @ 1%.
Those Persons who are importing urea and are neither on Active Taxpayer Listnor the holders of taxpayer’s card will be charged WHT @ 1.5% of the import value as increased by the custom duty, sales tax and FED whereas filers will continue to pay WHT @ 1%
Those Manufacturers who are covered under S.R.O 1125(I)/2011 and are neither on Active Taxpayer List nor the holders of taxpayer’s card will be charged WHT @ 1.5% of the import value as increased by the custom duty, sales tax and FED whereas filers will continue to pay WHT @ 1%.
Those Persons who are importing pulses and are neither on Active Taxpayer List nor the holders of taxpayer’s card will be charged WHT @ 3% of the import value as increased by the custom duty, sales tax and FED whereas filers will continue to pay WHT @ 2%.
Those Commercial importers who are covered under S.R.O 1125(I)/2011 and are neither on Active Taxpayer List nor the holders of taxpayer’s card will be charged WHT @ 4.5% of the import value as increased by the custom duty, sales tax and FED whereas filers will continue to pay WHT @ 3%.
Those ship breakers who are importing ships and are neither on Active Taxpayer List nor the holders of taxpayer’s card will be charged WHT @ 6.5% whereas filers will continue to pay WHT @ 4.5%.
In case of service providers, those companies which are neither on Active Taxpayer List nor the holders of taxpayer’s card will be charged WHT @ 12% whereas filers will continue to pay WHT @ 8%. Persons other than companies which are neither on Active Taxpayer List nor the holders of taxpayer’s card will be charged WHT @ 15% whereas filers under this category will continue to pay WHT @ 10%.