Islamabad: The Federal Board on Revenue (FBR) is planning to introduce a higher tax-rate for individuals who aren’t filers of sales tax and federal excise duty returns — with the initiative one of several other ‘rigorous’ procedures proposed to improve tax compliance.
It is reported that the government might raise the tax rate from the standard 17% rate applicable for non-taxpayers. These non-filers will also be rendered unable to avail the input tax credit. As per the sources, the government is urging the FBR to retain the income tax exemptions under the second schedule; the final decision for which will be taken in a meeting scheduled for today (Thursday). The said meeting will also review proposals for withholding tax revisions.
In the upcoming budget, the tax authorities are seeking to abolish almost 10 withholding taxes that generate less revenue and play no role in documentation. In addition, the government is also planning on imposing a withholding tax on foreign currency purchases, as part of the Financial Action Task Force (FATF) guidelines.