The Federal Board of Revenue (FBR) has imposed a uniform withholding tax rate of 15 per cent on filers and 30 per cent on non-filers for profit on saving certificates, which will be applicable on various instruments of National Savings Schemes (NSS) excluding profit of Bahbood savings certificates and pensioner benefit account, The News reported.
The new rates were announced by the Central Directorate of National Savings (CDNS) in a notification which said that the government revised the rates of withholding tax on NSS with effect from July 1, 2021 under the Finance Act 2021/22.
“The rate of tax on profit on debt imposed under the Section 7B shall be 15 percent effective from 1-7-2021. However, [for] person not appearing into active taxpayers list, the rate of tax required to be deducted or collected as maybe shall be increased by hundred percent of the rate specified in the first schedule of the said ordinance,” CDNS said in a statement.
The notification further said, “Now [for] the person appearing into ATL, the uniform rate of 15 percent of withholding tax will be charged irrespective of date of investment and amount. For person not appearing into ATL, the FBR will charge 30 per cent WHT irrespective of date of investment and amount.”
These revised rate have in turn increased the burden on NSS investors, as almost 98 to 99 per cent of small investors who rely on saving certificates do not exists on ATL. So, regardless of their investment limit, all these investors will now have to pay 30 per cent on their profits on monthly basis.
Most of the NSS investors, who are also non-filers earn a small amount of annual profits that is less than 500,000, and now as per the new law they will be charged with the additional 10 per cent tax.
Earlier, the WHT was 10 per cent for profit reaching PKR500,000 for filers and 20 per cent for non-filers. On the other hand 15 per cent was charged from filer investors earning profit beyond PKR500,000 and 30 per cent for non-filers.
While as per an official estimate, the investment in NSS is already declining as the department recorded PKR86 billion outflow during the first nine months of FY2021, compared to the net inflow of PKR258 billion during the same period last year.
From : pk.mashable.com