The federal government is considering extending withholding tax regime to all sectors in the value chain.
According to sources, currently, the withholding tax on persons falling under the supply chain of few business sectors in applicable at the rates of 0.1 percent and 0.5 percent for filers and 0.2 percent and 1 percent for non-filers.
However, now there is a proposal to extend withholding tax regime to all sectors in the value chain. The tax is to be collected by manufacturers/commercial importers from distributors, wholesalers and retailers.
The increase in WHT collection rates for non-filers will go from existing 0.2 percent to 0.5 percent from distributors, dealers and wholesalers and from existing 1 percent to 1.5 percent from retailers.
The total revenue impact of the said proposal will be close to Rs. 25 billion.
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