Tuesday , February 21 2017

Higher Withholding Tax Rate on Non-Cash Transactions Extended by 3 Months

Yesterday on Wednesday, the Economic Coordination Committee (ECC) of the Cabinet approved the application of reduced income tax rate of 0.4 percent for non-filers on non-cash banking transactions till March 31, 2017.

The existing tax rate of 0.4 percent will now be applicable until March 31, 2017 instead of January 01, 2017.

Finance Minister Ishaq Dar was the one who chaired the ECC and proposed this application for extension in the time period of applicability of the existing withholding tax rate of to the Federal Board of Revenue (FBR).

The withholding tax rate for non-filers of income tax returns on non-cash banking transactions above Rs 50,000 used to be 0.6% in the Finance Act 2015. The rate was then reduced to 0.3 percent after agitation from the business community.

Afterwards, the rate was increased to be 0.4 percent in March 2016 and since then, the rate has been kept the same by the Government.

Other Approvals from the ECC

The ECC also approved the proposal of the Ministry of Petroleum and Natural Resources, to allocate around 50 million standard cubic feet per day (MMSCFD) gas from Habib Rahi Limestone (HRL) reservoir to Thermal Power Station Guddu.

Further 26 MMCFD gas from HRL reservoir was allocated to M/s Engro Fertilizer Ltd’s old plant for continuation of the plant.

Futhermore, ECC also made the decision to allow export of 225,000 Metric Ton (MT) of available sugar, and only those mills which have cleared their outstanding dues will be allowed to make the exports. 1.23 million MT sugar is still going to be available for the country

ECC also decided that adequate and appropriate checks and balances should be kept by the Ministry of Commerce to maintain domestic price stability in the market at the current level.

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