Islamabad: The Federal Board of Revenue (FBR) on Wednesday announced its decision to abolish more withholding taxes in a phase-wise manner, a news source reported. To this effect, the board said that it would abolish 30 to 40 of these taxes in phases but had to collect them during the current year due to narrow tax base levels in the country.
FBR Chief of Income Tax Policy Reema Masud revealed this information during a webinar on ‘Economics of Tax Expenditure by FBR – A debate for reforms’. She highlighted that FBR had a long list of withholding taxes since it was the easiest method to generate tax revenue when the tax base stood at a narrow level. She added that FBR would have to keep relying on this mechanism until the tax base became broadened.
The webinar revealed that the FBR abolished nine withholding taxes in financial budget 2020-21 and planned to abolish more during the next fiscal year. Masud said that the FBR took all stakeholders on board in order to prepare a growth-oriented tax policy. She added that mini-budgets were required – especially under the IMF programme due to tight targets.
