In another major revenue spinning measure, the government is all set to enhance tax rates on services of professionals including doctors, lawyers, chartered accountants, architects, dentists, interior decorators and many others from existing 6 to 10 pc.
However, Prime Minister Nawaz Sharif on Thursday directed the FBR authorities not to increase the tax burden on the common citizens and on kitchen items such as vegetables, ghee, cooking oil, medicines.
“Prime Minister Nawaz Sharif has convened another crucial meeting on Friday to take decisions on withdrawal of hundreds of Statutory Regulatory Orders (SROs) as well as transferring SRO issuance powers to Parliament,” official sources in Finance Division confirmed to The News here on Thursday.
According to finalised budgetary measures, the government has decided to tap expenditures side of potential tax evaders in the coming budget as 10% withholding tax in adjustable mode is proposed to be levied on non- filers international travelers and 5 percent on registered travelers who travel in first class and business class of airlines.
“There will be no withholding tax on economy class of international travelers,” said the sources.
According to the working done to justify imposition of 10 percent withholding tax in adjustable mode on wealthy people who can afford to travel in first class or business class, the sale of total airline tickets for purpose of international traveling of wealthy class consumed Rs60 billion per annum. There is fixed Federal Excise Duty (FED) imposed on air traveling for both domestic and international travelers.
Currently, there is 5 percent Withholding Tax (WHT) imposed on domestic travelers and now the government would be moving towards slapping this tax on international travelers. “We expect that the FBR will generate around Rs6 billion through this tax measure in the next fiscal year,” said the official sources.
The government, the sources said, intended to move ahead to increase the tax burden on those who are unwilling to come into tax net.
Another proposal so far finalised by the government for upcoming budget is to increase rate of withholding tax on professionals such as doctors, lawyers, chartered accountants and many others.
The services under section 153(1) (b) of the Income Tax Ordinance 2001 attract tax deduction of 6 percent. The said rate is to be enhanced to 10 percent in the coming budget. Under section 153, the services include the services of accountants, architects, dentists, doctors, engineers, interior decorators and lawyers, otherwise than as an employee.
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