Federal Board of Revenue (FBR) has clarified certain media reports appearing in a section of the press claiming “advance taxes give artificial boost to revenue collection”.
In a statement issued today, FBR has termed the news report as misconceived and misguiding as the collection of Advance Tax depicts real time quarterly collection and the regime of Advance Tax collection is available in all developed countries’ tax systems.
Since advance tax is paid on quarterly basis, it saves the taxpayer from excessive burden at the end of a financial year. Such a taxation also gives real-time tax collection estimates to the government. Besides, it is in consonance with the universally acclaimed taxing maxim of ‘Pay as You Earn’. Lastly, Advance Tax is not collected on arbitrary grounds.
It is, in fact, collected in the light of clearly stipulated criterion laid down under Section 147 of the Income Tax Ordinance 2001 and the credit is given to the taxpayer at the time of filing of tax return.