Withholding tax collection

The government of Pakistan has reduced the withholding tax on services to 5% instead of 15% for payments with debit or credit cards. But some companies are still chargĀ­ing the full 15%, even on card payĀ­ments. These companies will most likely tell the FBR at the end of the tax year that they have only collectĀ­ed 5% tax and, in this way, will keep the remaining 10% of WHT collectĀ­ed as their own profit.

Some of these companies include international brands like Subway and McDonaldā€™s, which are charging 15% tax on card payments from all their customers. FBR should, thereĀ­fore, ask citizens to send pictures of receipts where 15% is charged on card payments along with the comĀ­pany name. At year-end, ensure that these culprits pay the full 15% tax on all their sales to the Government of Pakistan and also pay additional fines for not adhering to FBR rules.

SHAHRYAR KHAN BASEER

ISLAMABAD

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