The withholding tax (WHT) collection contributes a major chunk (64 percent) to the total collection of the gross income tax collection during the first half (July-December) of 2020-21, according to a report of the Federal Board of Revenue (FBR).
It issued a new report on revenue analysis during the first half (July-December) of 2020-21. It said that the WHT collection during FY 2020-21 has been Rs. 569.3 billion against Rs. 544.5 billion, indicating a growth of 4.6 percent.
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The ten major components of the withholding taxes that contributed around 83 percent to the total WHT collection are:
- Contracts
- Imports
- Salary
- Telephone
- Dividends
- Bank interest
- Cash withdrawal
- Technical fee
- Electricity
- Exports
Regarding growth, the collection from salaries has been on the top, with a growth of around 20.6 percent, followed by bank interest — 14.3 percent, and telephone — 13.8 percent.
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On the other hand, out of ten major items, four had recorded negative growth, including imports (14.2 percent), cash withdrawal (16.4 percent), technical fee (7.5 percent), and dividends (1.2 percent). The top-most contributor — the head of contracts — grew by just 2.6 percent. The negative trends shown by some WHTs are due to the adverse effect of the pandemic during the relevant period, the FBR added.
Under the head of payments with returns and advances, an amount of about Rs. 256.7 billion was collected during the first half of 2020-21, as compared to Rs. 248.2 billion in the FY 2019-20. The overall growth in this component has been 3.4 percent, which appears lower than expected, but this can be rightly justified because of the pandemic and its adverse impact on the economy, the FBR explained.
