KARACHI: The Federal Board of Revenue (FBR) has seen a seven per cent increase in withholding tax collection on cash withdrawals from banks during the first half of the current financial year 2020/21, as exemptions given to active taxpayers due to regeneration in economic activities. Have financial incentives. Friday.
According to the Regional Tax Office Karachi, which has jurisdiction to collect holding tax on cash withdrawals from the banking system, the collection under the head during the first half of the current financial year was Rs 4.2 billion as against Rs 3 billion. 9 crore. In the same period of last financial year
Taxpayers whose names are not in the ATL are subject to withholding tax at the rate of 0.6% under section (231A) of the Income Tax Ordinance 2001.
Sources said the application is applicable to ATL subscribers at a reduced rate of 0.3%. However, through the Finance Supplementary (Second Amendment) Act 2019, the 0.3% tax was abolished.
The government has withdrawn 0.3 per cent holding tax on taxpayers who are filing income tax returns and appearing in ATL to facilitate taxpayers and reduce the cost of financial transactions.
Sources said that the negative effects of the 0.3% reduction are huge. However, the resumption of economic activity during the first half of the current financial year increased the demand for cash-based transactions.
The government ended the Corona virus lockdown in June last year. The impact of the Corona virus lockdown was severe as the GDP growth rate during the fiscal year 2019/20 was 0.4%. However, the economy recovered after the lockdown was lifted. It is expected to increase by 1.5% during the current financial year.
The second wave of corona virus has once again forced people to keep money in the banking system. As of December last year, the reserves of the banking system had reached a record high of Rs 17.9 trillion. According to data released by the State Bank of Pakistan, reserves have increased by 22.1 per cent as compared to Rs 14.6 trillion a year ago.
Receipt of cash refunds was good during the month of December. Deposits under this head increased by 22% to Rs. 953 million in December. It was valued at Rs 782 million in the same month last year.