KARACHI: The Federal Board of Revenue (FBR) has introduced a 10% withholding tax on wedding halls, which will be directly collected from the booking parties hosting events rather than the hall owners.
This decision was finalized during a meeting between FBR officials and a delegation from the Wedding Hall Association in Karachi.
Rana Rais, President of the Wedding Hall Association, explained that the withholding tax would be charged as an additional amount on top of the wedding hall rent. He emphasized that the hall owners would not bear the tax burden.
“This tax is separate from the hall’s rental charges and will be applied to the booking party hosting the event,” Rais stated, urging citizens to familiarize themselves with the FBR’s policy.
The decision aims to boost tax compliance while ensuring that hall owners are not held accountable for tax collection.
The announcement comes as the FBR grapples with a significant revenue shortfall. The board has missed its five-month tax collection target by Rs356 billion, raising concerns among policymakers and international lenders like the International Monetary Fund (IMF).
From July to November, the FBR collected Rs4.28 trillion against a target of Rs4.64 trillion, marking a shortfall of Rs166 billion for November alone. While income tax collections exceeded expectations, indirect taxes, including sales tax and customs duties, fell significantly behind.
The IMF has expressed concern over the missed targets, warning that Pakistan may need to introduce additional revenue measures if collections do not improve by December. The government is reportedly considering a mini-budget to address the gap if the situation persists.
This withholding tax initiative, alongside other measures, is part of the FBR’s broader strategy to increase revenue amid political and enforcement challenges. However, the impact of these efforts on reducing the shortfall remains uncertain.
