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 charg­ing the full 15%, even on card pay­ments. These companies will most likely tell the FBR at the end of the tax year that they have only collect­ed 5% tax and, in this way, will keep the remaining 10% of WHT collect­ed as their own profit.

Some of these companies include international brands like Subway and McDonald’s, which are charging 15% tax on card payments from all their customers. FBR should, there­fore, ask citizens to send pictures of receipts where 15% is charged on card payments along with the com­pany 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