Islamabad Chamber of Commerce and Industry (ICCI) has appreciated the proposed reduction by Federal Board of Revenue (FBR) in the withholding tax rate from 0.5 percent to 0.1 percent. In a statement issued on Tuesday, ICCI President, Yassar Sakhi Butt said that this step would provide immediate relief to business community and to meet challenges faced by the national economy. The current rate of withholding tax puts burden on dealers, wholesalers and retailers, therefore, bringing down this tax from 0.5 to 0.1 percent would be a wise approach to encourage tax culture in the country. He said empirical experience proves that high tax rates have always promoted a culture of tax evasion while low tax rates broaden tax base by luring potential taxpayers into tax net. Yassar Sakhi Butt was of the view that government can bring a hefty improvement in tax revenue by rationalizing tax rates and bringing exempted sectors into the tax net. He also stressed for making refund processes easier as large amounts of businessmen were stuck in refund claims due to complicated refund procedures. ICCI President underlined the need to educate the small and medium tax payers about the basics of sales tax registration and other procedures of sales tax laws.
ICCI hails withholding tax rate reduction
