PBC suggested three times higher withholding tax for non-filers. In order to improve revenues of the country, Federal Board of Revenue (FBR) will continue to facilitate taxpayers and focus on non-filers by increasing taxes on them. Pakistan Business Council (PBC) has recommended a higher withholding tax for non-filers in the upcoming budget for the fiscal year 2018-19.
In a report submitted to FBR, PBC specified its recommendations about incentives for filers. Furthermore, report states that Pakistan needs to document its economy as well so it suggested increasing the efforts to do so with the help of data collected by FBR.
However, the idea of increasing the tax for nonfilers has been appreciated by the Council. On the other hand, they in their report recommended that the WHT for non-filers should be at least three times greater than that for filers.
The high withholding tax charge for non-filers will offer clear incentives to those that file their returns. Furthermore, it will surely encourage the non-filers to file their tax returns as properly.
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According to the reports, FBR can raise the tax base and decide WHT for non-filers by gathering data from different sources. It will include data from the real estate sector and NARDA to help out in documenting the transactions regarding property transfers.
There is no doubt that real estate segment is a mega-market that goes unnoticed while computing the taxes. FBR can considerably increase the revenue base by documenting and taxing this sector, the report suggested.
On the other hand, Federal Budget for Financial Year 2018-19 is likely to be presented on April 27.
Currently, the government also announced to notably cut income tax rates as well. Though, experts are foretelling that this will reduce the previously narrow tax base of Pakistan and will upshot in Rs 90 billion annual loss to the economy.
Well, the government is hoping to raise the tax base through the recently announced reprieve scheme.
