ISLAMABAD: Prime Minister Nawaz Sharif has advised the president to issue the Ordinance regarding adjustment in withholding tax, reducing it from 0.6 per cent to 0.3 per cent, stated the PM house on Saturday.
Following the advice from the premier, President Mamnoon Hussain will issue an Ordinance after which the decision to reduce withholding tax on cash transactions will come into force from July 11, 2015 (today).
This was decided after Federal Minister for Finance Ishaq Dar met Nawaz Sharif at PM House earlier on Saturday. The finance minister briefed the premier about agreement reached with traders’ associations and members of business community regarding the adjustment in withholding tax on banking transactions from 0.6 per cent to 0.3 per cent and other matters related to Federal Board of Revenue.
Dar also briefed Nawaz about his visit to China, signing of AIIB Articles of Agreement and meetings with heads of financial institutions including Exim Bank.
It was in this meeting that the finance minister solicited in principle the approval from the prime minister for issuance of ordinance on adjustment of withholding tax.
The new rate will be in force till September 30 – the last date for filing income tax returns for the tax year 2015. The tax does not apply to filers of income tax returns.
The finance minister said that the reduced rate would expire on Sept 30 and from Oct 1 the original rate of 0.6pc would be charged.
There are less than 0.9 million people, or 0.4pc of the country’s population, who filed tax returns with the FBR.