FBR urged to massively cut tax rates for filers

KARACHI: The Federal Board of Revenue (FBR) has been asked to massively reduce withholding rates for annual tax filers to ease the burden on compliant taxpayers.

The Pakistan Business Council (PBC), in its 2022/2022 budget proposals submitted to the FBR, recommended a reduction in withholding tax rates for filers.

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He said the difference in withholding tax rates between filers and non-filers is nominal. Discrimination in the tax treatment of filers and non-filers is commendable.

“However, it has now become a measure of revenue without any effort to use the data collected to increase documentation and broaden the tax base,” the PBC said.

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He recommended that the withholding tax regime be simplified by reducing the number of withholding tax systems.

The current withholding tax guide available on the FBR website is a 48-page document as of 2021, which clearly shows the complexity of the regime from a compliance and ease of doing business perspective.

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“There must be a meaningful distinction in the income tax withholding rates charged to non-filers versus the rates for filers. but also that the cost of doing business for non-complainants is increased.

Earlier, the PBC urged tax authorities to monitor under-invoicing and misrepresentation by commercial importers as these destroy local industry.

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He further said that information regarding the values ​​at which various customs checkpoints clear imported shipments is not publicly available. This encourages unscrupulous importers to under-declare the value of shipments to escape government revenue.

“The values ​​at which imported shipments are cleared through PRAL or CARE should be publicly available,” the PBC recommended.