The Federal Bureau of Revenue has moved to introduce a new withholding tax that will be collected from the party making the booking for marriage ceremonies held in wedding halls.
In this regard, the FBR will collect withholding tax instead of hall owners. One more move by the FBR amid its continuous efforts to streamline taxation and increase revenue collection in various sectors.
The issues regarding the tax collection were resolved recently in a meeting held with officials of the Wedding Hall Association in Karachi. According to Rana Raees, President of the Wedding Hall Association, FBR will collect withholding tax of 10% directly from the people making the booking for the ceremony along with the rent for the place.
Raees said that the decision was taken after discussions with FBR officials, who clarified that the tax amount would not be the responsibility of the wedding hall owners but of the individuals organizing the wedding events. The new tax policy is aimed at better compliance and transparency in the sector, which has seen growing scrutiny from tax authorities.
“The 10% withholding tax is a separate charge from the wedding hall rental fee and will be directly collected from the party booking the hall,” Raees said, urging the public to remain informed about the new tax regulations. He emphasized that wedding hall owners will not be directly impacted by the collection of this tax because this falls under the responsibility of the person or people hosting the wedding event.
It will hit most wedding ceremonies held at all the venues as it targets the industry, which experiences a tremendous rate of turnover during its peak seasons. The marriage hall proprietors and event coordinators should explain to the customers about the tax collection to avoid any hassle during collection.
This new tax measure is one part of the FBR’s policy of increasing its tax base by garnering more revenue from previously unreported or untaxed services.
Even though owners of wedding halls had criticized the effects of this policy, the agreement reached between the FBR and the Wedding Hall Association appears to define the tax collection mechanism much more clearly, setting guidelines for both parties involved.
