Finance division’s clarification on ‘Taxing the poor’s savings’
July 25, 2021
ISLAMABAD: In an article, titled ‘Taxing the poor’s savings’, published in The News on July 17, 2021, Muhammad Ejaz-ul-Haq and Muhammad Tariq raised a number of concerns regarding the changes in the tax policy applicable to the income from deposits and investments.
The article is misleading as it is based on a poor understanding of benefits available under the national saving schemes (NSS) and the applicable tax regime in the country. We would restrict this response to the policy changes, introduced in the budget and would argue that the changes would have no impact on earnings of the investors in NSS.
50% increase in tax rates on NSS profits announced
Tax rate hike makes National Savings Scheme an unattractive investment
Salaried class contributed Rs69.4 billion or 7.8% of the total income tax collection in the first half, which was higher by 20% when compared with the same period of last year. PHOTO: FILE
ISLAMABAD:
The Central Directorate for National Savings (CDNS) has notified a 50% increase in the income tax rates on the profits earned by making investments in various government schemes – a move which may further discourage small investors from putting their money in these schemes.
Effective from July 1, the rate for tax-for-profit on debt imposed under Section 7B (of the Income Tax Ordinance) shall be 15%, according to a notification issued by the CDNS. However, persons not appearing in the active taxpayers list will be charged at 30% income tax rate, it said.
A tax official said that currently the withholding tax rate was 10pc on profits of NSS while 5pc tax will have to be deposited at the time of depositing income tax returns. Dawn/File
ISLAMABAD: The Federal Board of Revenue (FBR) on Saturday announced that the rate of withholding tax on profit of national savings schemes (NSS) will be 15 per cent effective from July 1, 2021.
According to a circular, the rate will be available only to those people who are on the Active Taxpayers List (ATL). The rate will be 30pc for those who are not on the ATL.
Pakistan revises profit rates of National Savings certificates geo.tv - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from geo.tv Daily Mail and Mail on Sunday newspapers.
Govt revises profit rates on national savings schemes arynews.tv - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from arynews.tv Daily Mail and Mail on Sunday newspapers.