Revenue Board working to raise withholding tax on services to 10 %

Karachi –– Federal Board of Revenue (FBR) is reviewing a budgetary proposal to increase the rate of withholding tax on services provided or rendered, from 6% to 10%, in the budget FY12.

According to Alfalah Securities Limited, in case the FBR finalizes the budget proposal, it would be another revenue generation measure. It is under consideration whether to increase 6 % rate under section 153 of the Income Tax Ordinance 2001 to bring it in line with the 10% withholding tax rate applicable on commission, profit of debt and dividend, etc. In case of commission, the rate of withholding tax is 10% and the proposal is directed to bring the withholding tax rate of services provided or rendered at par with the commission rate.

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