FBR Introduces 10% Withholding Tax on Wedding Hall Events

 

The Federal Board of Revenue (FBR) has implemented a 10% withholding tax on wedding events, which wedding hall owners will now collect from customers.

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FBR introduces a 10% withholding tax on wedding events. Learn how this new policy impacts wedding hall rentals and customers in Pakistan.

Agreement Between FBR and Wedding Hall Owners

According to Dawn News, FBR officials recently met with representatives of the Wedding Hall Owners Association to finalize the decision. During the meeting, both parties agreed that a 10% withholding tax would be collected on all weddings and other events hosted in wedding halls.

The President of the Wedding Hall Association stated:

• "From now on, every customer hosting an event in a wedding hall will require to pay a 10% withholding tax. This decision has been made under FBR’s directives and will be separate from the rental charges of the wedding hall."

Implications for Customers

Event organizers must now pay an additional 10% withholding tax on top of the hall rental fees. This amount will be submitted directly to the FBR. Wedding hall owners emphasized that customers should distinguish between the rental charges and the withholding tax during payments.

Tax Reforms and Broader Implications

This new tax initiative is part of the federal government’s extensive tax reforms following its agreement with the International Monetary Fund (IMF). Similar steps have been taken previously, such as:

• Integration of restaurants, shopping centers, and retailers with the Point of Sale (POS) System.
• Withholding tax collection directives for flour mills, which led to strikes by the Flour Mills Association.

These reforms aim to increase revenue collection but have also faced resistance from various business groups.

Impact on Wedding Hall Industry

Wedding hall owners have clarified that the 10% withholding tax collection is mandatory and does not contribute to their earnings. However, this new policy might create challenges for customers, especially those with tight budgets.

Final Thoughts

As the withholding tax policy takes effect, it is crucial for event organizers to account for this additional expense when booking wedding halls. While the tax aims to boost government revenue, it adds another financial layer for individuals planning their events.