ISLAMABAD – Pakistani government is tightening the noose around the non filers and new taxes are being introduced in Budget 2024-25 to generate additional funds.
In the upcoming budget 2024-25, the government is set to make several changes to tax laws aimed at increasing the cost of financial transactions for non-filers of income tax returns.
The new changes are expected to generate an additional Rs300 to Rs400 billion in revenue for the fiscal year 2024-25. Federal Board of Revenue (FBR) will be empowered to document supply chains for all major businesses, sources claimed.
Taxes in Budget 2024-25
Taxes on cash withdrawals from banks could be raised in the next budget, following discussions between Pakistani authorities and IMF. An estimated Rs15 billion annually could be collected through an advance tax on cash withdrawals.
FBR further proposed increasing the withholding tax on cash withdrawals by non-filers from 0.6% to 0.9%, the move could generate Rs15 to Rs20 billion in extra revenue.
Withdrawals exceeding Rs50,000 in a single day by non-filers, through credit cards or ATMs, would also be subject to a 0.6% withholding tax.
To make supplies to unregistered persons more costly, the government aims to penalize non-filers and address issues in the personal income tax structure that allow for income characterization to minimize tax burdens. The government’s efforts to crack down on non-filers are already underway.
PML-N led alliance government is also mulling to impose higher taxes on income from non-essential and luxury items.
The government is expect to introduce unified turnover-based registration threshold for all businesses, eliminating previous discriminatory practices. An overseas vendor registration regime might be implemented, requiring foreign suppliers to Pakistani consumers to register and collect federal sales tax.
Furthermore, the government plans to impose a duty on input tax claimants to prevent involvement in missing trader fraud and ensure they report suspicious transactions, with penalties for non-compliance.
Federal Board of Revenue (FBR) also decided to impose an additional 90 percent withholding tax on mobile top-ups for non-tax filers, amid blocking of sim cards.
Under the consideration, non-filers will now have to pay 90 percent withholding tax on mobile top-ups until they file their income tax returns. Under this proposal, if a non-filer tops up their phone with Rs 100, they will only receive Rs 10 worth of credit, with Rs 90 being deducted as tax.
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