ISLAMABAD, March 1: Advisory Council of the Revenue Division here on Friday unanimously decided to withdraw the collection of withholding tax on issue of bonus shares.

The council meeting, which was presided over by Finance Minister Shaukat Aziz, however, said that income on bonus shares would remain payable under normal law. The minister directed the Central Board of Revenue to take necessary steps in this regard.

According to an official announcement, the meeting discussed the income tax laws/rules relating to withholding tax by commercial exporters/manufacturers. The issue was unanimously resolved. The CBR clarified that rate of tax on commercial exporters and manufacturers was same and that there was no difference in rules/laws between the commercial exporters/manufacturers/exporters.

The meeting decided that incidence of the tax on various schemes of national savings would continue to be enforced. It expressed satisfaction over the increased remittances from abroad from $80 million to $180 million per month and observed that this increased flow of remittances from overseas Pakistanis was a result of financial regime enforced by the government.

The meeting also reviewed matter pertaining to filing of income tax appeals. Aziz directed the CBR to study the issue in details and propose a plan in consultation with the council members for redressal of the grievances.

The finance minister further asked the CBR chairman to introduce a dispute resolution mechanism for non-complaint taxpayers.

Earlier, he briefed the meeting about economic performance and said that international financial institutions had reposed their confidence in the financial management of Pakistan.

Pakistan, he said, had successfully completed IMF standby arrangement (SBA) programme. The Poverty Reduction Growth Facility (PRGF) programme, the minister said, was in progress and the second tranche of around $109 million was likely to be released shortly. Pakistan’s international credit rating has improved and as a result international banks have provided risk cover to the foreign investors.