KARACHI: The withholding tax (WHT) collection from non-cash banking transactions has plunged 14% to Rs2.21 billion during the first quarter (July-September) of FY19 as the number of returns filing rose.
Sources on Friday said, withholding tax collection was recorded at Rs2.56 billion in the corresponding period of FY18, reports The News.
According to sources in the Large Taxpayers Unit (LTU) Karachi of the Federal Board of Revenue (FBR), the fall in collection was due to measures were taken by the government to encourage declaration of assets and filing of yearly returns.
The latest weekly updated list of active taxpayers list (ATL) revealed that the number of return filers rose to approximately 1.66 million, which stood at 0.87 million in 2013.
Although the fall in tax collection was reflective of improvement in conformity, it also raises obstacles for the tax machinery already beleaguered to increase revenue collection.
For the tax collection machinery, the challenges have been persistent and continuing in attaining a desirable revenue collection target.
They faced a revenue deficit of over Rs60 billion during the first four months (July-October) of FY19. The FBR was able to amass Rs1.106 trillion during the above-mentioned quarter against a target of Rs1.166 trillion.
Also, the government faces a huge challenge to amass Rs4.4 trillion in revenue during FY19 and to rein budget deficit at 5.1% against the previous target of 4.9% and compared to 6.6% attained in FY18.
However, a tax official voiced optimism that the newly launched provision would greatly raise the number of return filers.
As per the new law, late return filers will not get their names listed in active taxpayers list from tax year 2019 onwards.
To avail, the reduced rate of withholding tax, having the name included in the ATL is a prerequisite.
