Traders availing tax amnesty exempted from withholding tax

KARACHI: The government has exempted traders who are signing in the voluntary tax compliance scheme from deducting/withholding tax on purchases, a minister said on Wednesday. 

“Both new and existing filers would not be the prescribed persons to deduct/withhold tax under section 153 of Income Tax Ordinance while making payment for purchases of goods,” said Haroon Akhtar, Minister of State on Finance, speaking at a seminar on voluntary tax compliance scheme (VTCS) at Regional Tax Office, Karachi.

“They would not be obliged to furnish wealth statement if the taxable income is less than one million rupees. Taxpayers enrolling for the scheme would also be immune from audit.”  Minister Akhtar said the scheme addresses all the concerns of the traders, “this is the right opportunity for them to get into the tax net.”

The taxpayers are required to deduct/withhold tax on supplies and purchases from their vendors and they have to timely deposit the withheld money into the government exchequer. This is a cumbersome procedure and also involves cost as the withholding agents have to make appropriate arrangements in this regard.

The office bearers of traders associations said VTCS was launched on their demand and in consultation with traders. They said the scheme is totally businessmen friendly.

The minister assured traders’ community of his full support and cooperation. He informed the participants that tax facilitation camps have already been established in different cities where Income Tax officials were posted to help traders in filing of returns under this scheme.

“It is first time in the history of Pakistan that a simple one page income tax return has been introduced to facilitate traders,” Akhtar said. He said this traders-friendly scheme will result in increase in tax base as well as government revenue.

The minister asked the business community to avail full advantage of this scheme and help the government in making Pakistan a progressive and welfare country.