Government simplifies withholding tax regime | CustomNews.pk

Government simplifies withholding tax regime

KARACHI: To augment efforts towards simplification of the withholding tax regime, the government has deleted several withholding tax provisions including collection collection of advance tax on education related expenses remitted abroad; tax on steel melters and composite units; withdrawal of balance under pension fund; tax on local purchase of cooking oil or vegetable ghee by certain persons; advance tax on functions and gatherings; advance tax on cable operators and other electronic media; advance tax on dealers, commission agents and arhatis etc.; advance tax on insurance premium. This measure would reduce the cost of the compliance of taxpayers, enhance the control of FBR over the withholding tax regime and would be pivotal in promoting ease of doing business. Enhancement of threshold for becoming prescribed person for withholding of tax on supplies, services and contracts from fifty to hundred million rupees and a similar threshold of hundred million rupees is prescribed for a sales tax registered person to become a withholding agent. To incentivize and propel economic activity in the real estate sector, the bifurcation of plots and constructed property for determining holding period of capital gains is being done away with i.e. the holding period for taxation of capital gains on disposal of immovable property is being restricted to 4 years. In addition, rates are also being reduced on capital gains emanating from disposal of immoveable property.
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