KARACHI, December 3, 2024 – The Federal Board of Revenue (FBR) has updated advance tax rates applicable to marriage gatherings across Pakistan for the tax year 2025. These updates, issued under Section 236CB of the Income Tax Ordinance, 2001, aim to enhance compliance and revenue collection from events held at marriage-related venues.
Key Provisions of Section 236CB
According to the FBR, advance tax is to be collected by prescribed entities from individuals arranging or hosting marriage functions. Sub-section (1) mandates that the tax be charged on the total bill for events held at marriage halls, marquees, hotels, restaurants, commercial lawns, clubs, community centers, or any other venue used for such purposes, subject to prescribed limitations.
In cases where food, services, or facilities are provided by a third party, Sub-section (2) stipulates that the prescribed person must collect additional advance tax on these payments from the host. Sub-section (3) clarifies that all advance tax collected under Section 236CB is adjustable against the taxpayer’s overall liability.
Definitions and Applicability
Sub-section (4) of the ordinance expands on relevant definitions. A “function” includes not just marriage events but also wedding-related celebrations, seminars, workshops, exhibitions, concerts, and other similar gatherings. The term “prescribed person” encompasses owners, leaseholders, operators, or managers of marriage venues, whether halls, marquees, hotels, or lawns.
Updated Tax Rates for Marriage Functions
The revised tax rates outlined in Section 236CB impose a 10% advance tax on the total bill for individuals listed on the Active Taxpayers List (ATL). For those not appearing on the ATL, the rate doubles to 20%, underscoring the FBR’s push to encourage registration on the taxpayer roll.
Marriage gatherings, being prominent social events, represent a significant segment of taxable activities in the hospitality sector. These new rates aim to ensure equitable taxation and foster compliance while generating substantial revenue from the growing trend of elaborate wedding celebrations.
The FBR emphasizes that venue operators and service providers must rigorously adhere to these regulations, ensuring efficient tax collection on marriage-related functions throughout the country.
