KARACHI: The tax regulator is contemplating to carry out a forensic audit of share transactions as withholding tax collection on securities exhibited a sharp decrease of roughly 39 percent in FY18, officials said on Friday.
According to officials, withholding tax collection from share transactions fell to Rs1.37 billion in FY18 against Rs2.23 billion in FY17, reports The News.
The responsibility of collecting withholding tax from members is assigned to Pakistan Stock Exchange (PSX) at a rate of 0.01 percent on every transaction of purchase and sale of shares.
The Federal Board of Revenue (FBR) officials deduced hiding of withholding taxes on share transactions since the brokerage commission on these transactions exhibited growth during FY18.
Withholding tax collection from brokerage and commission registered 12 percent rise, touching Rs14.29 billion in FY18 against Rs14.73 billion in FY17.
The tax regulator officials stated the withholding tax was levied to widen the tax net by identifying the source of income in terms of investments made in shares.
The officials cited there was a chance of forensic audit being conducted after filing of annual income return for the tax year 2018 is done by withholding agents.
The returns filing for the tax year 2018 will be concluded by December 2018.
The withholding tax on sale and purchase of shares was levied in 2012, however, officials stated collection under this head posted a rise despite the poor performance of the stock market.
