The government is noticing the endorsement as proposed by RRMC(Reforms and Revenue Mobilization Commission)so that in the coming budget year ( 2023-3024) so that the withholding taxes in the wholesale, as well as retail sectors, can be abrogated.
According to the income tax ordinance sections 236G,236H, 153, and 113, on the recommendation of RRMC to Finance Minister Ishaq Dar they recommended that the multiple tax rates on the wholesale and retail sector should be eliminated.
Under sections 236G and 236H, tax-holding should be applied to all boards of goods or sectors, providing low rates for active taxpayers and higher tax rates for active or non-paying persons. According to the Federal Board of Revenue, it creates a tax gap of RS.550 billion.
Furthermore, it would be essential for the marketers to provide complete relevant details including the name, address, and CNIC of their buyers while returning their sales taxes along withholding statement they write under section 236H. And in case they do not do so, income, as well as input tax, shall not be given to them.
There should be equal rate of withholding tax among contractors and
dealers. There is a need for descriptive attempts and tries to make this tax proposal neutral.
The tax system is unorganized and hence there is a requirement to slowly change this inefficient system in the country. RRMC stated that if conditions are associated with tax credits then this will lead to positive and effective impacts in the future.
