The Federal Board of Revenue (FBR) has taken measures to revise tax rates for non-active taxpayers in an effort to increase tax collection from those who have not yet become part of the tax system.
According to the latest notification, there will be no tax deduction on cash withdrawals below Rs50,000 per day. Previously, the government had introduced a 0.6 per cent tax deduction on cash withdrawals for individuals not on the Active Taxpayers List (ATL).
However, for those not listed on the ATL, the tax deduction on cash withdrawals will vary based on the amount withdrawn. For instance, a deduction of Rs303 will be made for cash withdrawals of Rs50,500 per day, and the amount will increase to Rs330 for withdrawals of Rs55,000 and Rs450 for withdrawals of Rs75,000.
Certain exemptions will apply, including federal and provincial governments, foreign diplomats or diplomatic missions in Pakistan, and individuals who produce a certificate from the commissioner stating their income is exempt for the tax year.
For motor vehicles with an engine capacity of 2001 cc and above, the fixed tax amount has been replaced with a tax rate of 6 per cent, 8 per cent, and 10 per cent based on engine capacity. However, for non-ATL individuals, the tax rates will be doubled to 18 per cent, 24 per cent, and 30 per cent, respectively.
Regarding the sale and purchase of immovable property, the withholding tax rates have been increased from 2 per cent to 3 percent through the Finance Act 2023.
The responsible party involved in registering, recording, or attesting the transfer of the property will collect either 3 per cent or 6 percent tax of the gross amount received from the seller based on their ATL status. These measures are aimed at reducing foreign exchange outflow from the country.