Withholding tax, in some countries it is known as ‘pay as you ear (PAYE)’, is a biggest sources of revenue of government. Around 50% revenue is earned by government from withholding taxes. Usually all business are required to deduct tax while making some payment.
Filing of Statement of Tax Collected and Deducted
Statement of Tax Collected Deducted
All businesses, liable to deduct withholding tax, are also required to file “Statement of Tax Collected and Deducted”. Tax deducted collected should be deposited in national treasury/State Bank of Pakistan or National Bank.
Date and Particulars of Statement
Every prescribed person collecting tax under Division II of this Part or Chapter XII or deducting tax from payment under Division III of this Part or Chapter XII shall furnish or e-file statements under sub-section (1) by the 15th day of the month following the month to which the withholding tax pertains.]
Tax on Salaries
All business individuals, firms, NGO’s , companies and government organization are required to deduct tax while making payment to an employees whose salaries are taxable.
All companies , sales tax registered persons ,individuals and AOP’s having 50 million turnover are required to deduct withholding tax while making payments for purchase of goods and services acquired
Following persons and organizations are required to deduct tax while making payment of purchase of goods and receipt of services:
(a) Federal Government
(b) Every Company
(c) Association of persons constituted by, or under law
(d) Non-profit organization
(e) Foreign contractor or consultant
(f) Consortium or joint venture
(g) Exporter or an export house for the purpose of sub-section
(h) an association of persons, having turnover of fifty million rupees or above in tax year 2007 or in any subsequent tax year
(i) an individual, having turnover of fifty million rupees or above in the tax year 2009 or in any subsequent year
(j) a person registered under the Sales Tax Act, 1990
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