A meeting of the Standing Committee on Finance was held under the chairmanship of Senator Saleem Mandviwala at Parliament House today where the committee members approved the budget 2023-24 proposal to increase the withholding tax (WHT) on international credit card transactions to 2 percent for individuals on Active Taxpayer List (ATL) and 10 percent for non-ATL citizens.
The committee was briefed that during July-March 2022-23, international transactions to the tune of Rs. 260 billion were reported from the country.
FBR officials said external payments via credit/debit cards are subject to a WHT of up to 5 percent in the outgoing fiscal year, with 1 percent levied on filers and 5 percent on non-filers.
Officials of the State Bank of Pakistan informed the committee that roughly $1 billion exits the country each year through credit and debit card transactions.
In order to control the flow of currency, officials said this tax rate is being doubled in the Finance Bill 2023, up from 1 percent to 2 percent for filers and from 5 percent to 10 percent for non-filers.
After detailed discussions on the matter, the committee approved the regulator’s proposal to increase the WHT on international credit card transactions to 2 percent for ATL and 10 percent for non-ATL citizens.
Tax on Elite on Hiring Foreign Domestic Workers
Committee members further approved a clause in Finance Bill 2023 that allowed the federal government to collect Rs. 200,000 adjustable advance tax from the employers of foreign workers employed as domestic helpers in Pakistan at the time of issuance/renewal of work permit/visa to such foreign helpers.
According to Finance Bill 2023-24, any authority issuing or renewing a domestic aide visa to any foreign national as a domestic worker at the time of issuing or renewing such visa shall collect from the agency, sponsor, or the person as the case may be, employing the services of such foreign national a tax of Rs. 200,000.
Tax on Purchase of Immovable Property for Ex-pats
Separately, the committee approved waiving off a 2 percent final withholding tax on the purchase of immovable property for non-resident individual POC/NICOP holders where the immovable property is acquired through foreign remittances remitted from abroad.
Why not 5% decrees for filers? Filers get nothing but tag of being filer.
Yes, you are right. There are no benefits of being a filer here in Pakistan except being robbed. The govt here is like we are going to rob you with this % tax but if you become filer we will be easy on you and will rob you with a little less % of tax. You will be robbed anyways doesn’t matter whether you are a filler or not