The Federal Board of Revenue (FBR) is likely to raise a 1 percent rate on 31 different kinds of withholding taxes from next month if the revenue shortfall continues in September 2024.
In this regard, the FBR has drafted a mini-budget proposal on WHTs.
According to the details, presently 31 types of withholding taxes are applicable on various financial transactions. The FBR has proposed to increase withholding tax rates by one percent if the FBR continues to face a shortfall in tax collection during the last month of the first quarter (July-September) of 2024-25.
The proposal would be implemented through a supplementary finance bill in case the FBR fails to meet the target for September 2024. Now, it depends on the tax collectors to meet the target for September 2024 or further increase withholding tax rates in October 2024.
The standard rate of sales tax may not be increased but the withholding tax rates are proposed to be raised by one percent in case of persistent revenue shortfall in tax collection, sources maintained.
The FBR has suffered a huge shortfall of Rs. 98 billion in tax collection during the first two months of 2024-25, as net collection stood at Rs. 1,456 billion against the assigned target of Rs. 1,554 billion during this period.
