ISLAMABAD – Pakistan’s top tax collecting agency has raised the withholding tax rate.
According to a statement issued by the Federal Board of Revenue (FBR), the authority changed the withholding rate for anyone making more than Rs.600,000 to Rs.1,200,000. The tax rate is 2.5 percent of amount exceeding Rs.600,000.
Rs.15,000 + 12.50 percent of the amount in excess of Rs.12,000,000 for those whose gross salary exceeds Rs.1,200,000 but not more than Rs.2,400,000.
Further notification states that if taxable income (gross pay) exceeds Rs.2,400,000 and not exceeds Rs.3,600,000. Rs.165,000 + 22.5 percent of amount exceeding of Rs.2,400,000 will be deducted.
Where taxable income gross salary exceeds Rs.3,600,000 to Rs.6,000,000, 27.50 percent of the amount beyond Rs.3.6 million and Rs.435,000 will be deducted.
People who are in the top slab and are earning more than Rs.6 million, will pay Rs.1,095,000 plus 35% of amount exceeding Rs.6,000,000.
Similarly, in order to promote transparency and tax compliance, the government defined increased tax rates on cash withdrawals. Cash withdrawals over Rs.50,000 are subject to larger tax deductions for non-filers than for filers.
In contrast to non-filers, who may be subject to considerable deductions depending on the quantity of cash withdrawn, filers are no longer subject to tax deductions for cash withdrawals under Rs50,000 per day. With this step, the government hopes to encourage non-filers to start paying taxes and boost the nation’s revenue.
Here’s all you need to know about fixed tax rates for filers, non-filers in current FY
