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Category: Budget

This is parent category of budget presented by Pakistan government. Here you will find year-wise federal and provincial budgets.

  • Sindh unveils Rs1.714 trillion budget for 2022/2023

    Sindh unveils Rs1.714 trillion budget for 2022/2023

    KARACHI: Syed Murad Ali Shah, Chief Minister of Sindh on Tuesday presented provincial budget 2022-2023 with total outlay of Rs1.714 trillion.

    The province estimated the deficit budget amounting Rs33.85 billion for the next fiscal year.

    READ MORE: Khyber Pakhtunkhwa raises salary, pension by 15%

    The chief minister said that the total budget outlay for Financial Year 2022-2023 is estimated at Rs.1.714 trillion, as against budget estimate of Rs.1.478 trillion for 2021-2022, showing overall increase of 15.9 per cent.

    The current expenditure of the province is projected at Rs.1.254 trillion, which includes current revenue expenditure of Rs. 1.199 trillion and current capital expenditure of Rs.54.5 billion.

    This is 73.2 per cent of total expenditure of the province and shows an increase of 9.1 per cent in comparison to the current expenditure for last year that was Rs.1.148 trillion.

    READ MORE: Khyber Pakhtunkhwa presents Rs1.33 trillion budget 2022-2023

    The chief minister said that for the next financial year, size of development budget will be Rs459.658 billion as compared to Rs. 329.033 billion in year 2021-2022, that will include Rs. 332.165 billion for Provincial Annual Development Plan (ADP) and Rs.30.00 billion for Districts ADP.

    Foreign project assistance of Rs.91.468 billion from the development partners and Rs.6.025 billion are expected from Federal PSDP grant for schemes being executed by Government of Sindh.

    Murad Ali Shah said shift in federal priorities during last four years caused the people of the second largest province face deprivation due to lack of infrastructure development and non-provision basic health facilities in rural areas.

    READ MORE: Advance tax on immovable property purchase enhanced to 250% for non-filers

    “Despite these difficulties we maintained our resolve towards our development objectives,” he added.

    Hence, next year’s ADP will include schemes to provide basic facilities to the marginalized segments of society. More resources are being allocated for water and sanitation, road network, transport, health and education sectors to provide maximum relief to the common people in the next year’s ADP.

    There are 2,506 ongoing schemes with allocation of Rs. 253.146 billion being 75  per cent of total ADP.

    There are 1,652 new schemes with allocation of Rs.79.02 billion being 25  per cent age of total ADP

    On-Going schemes where more than 70 per cent expenditure is made, have been fully funded for completion by June, 2023.

    More than 1,510 schemes have been fully funded and are expected to be completed in next financial year 2022-23.

    READ MORE: Pakistan massively increases taxation on motor vehicles

    Allocation for Education Sector schemes is Rs. 34.22 billion (10.2 per cent of the total size).

    Allocation for Health Sector schemes is Rs. 23.33 billion (6.5 per cent of the total size).

    Allocation for Water and Sanitation Sector (PHE & LG) is Rs. 59.36 billion (18  per cent of the total size).

    Allocation for Agriculture & Livestock sector is Rs 10.2 billion (3  per cent of total size)

    Allocation for Irrigation including lining is Rs. 32.5 billion (12 per cent of the total size).

    Allocation for Transport & Communication (Road under W&S and LG) sector is Rs. 100.64 billion (30  per cent of the total size).

    Allocation for Karachi based schemes is Rs. 118 billion, Rs.72 billion under ADP, Rs. 5 billion under District ADP and Rs. 41 billion through Foreign Project Assistance.

    Keeping in view the above non-development and development expenditure priorities, the major milestones of our objectives are:

    READ MORE: New rates of capital gain tax on disposal of securities

    Provide infrastructure to educational institutions for increased enrolment.

    Improve and Upgrade health facilities and manage available health institutions

    Provide nutrition support, community infrastructure funds, income generating grants, micro assets, and low cost housing for reducing poverty of poorest of the poor.

    Increase agricultural productivity and value chain, Conservation of water for agriculture, industrial and municipal consumption.

    Provide clean drinking water and safe disposal of sewerage.

    Improve connectivity between major cities and towns of province.

    Increase road connectivity and planned mass transit for Karachi city.

  • Khyber Pakhtunkhwa raises salary, pension by 15%

    Khyber Pakhtunkhwa raises salary, pension by 15%

    PESHAWAR: Khyber Pakhtunkhwa on Monday announced 15 per cent increase in salary of provincial government employees and 15 per cent increase in pension as well.

    Finance Minister Taimur Salim Jhagra announced the increase in salary and pension of provincial employees while presenting the provincial budget 2022-2023.

    READ MORE: Khyber Pakhtunkhwa presents Rs1.33 trillion budget 2022-2023

    The minister announced Rs15 percent increase in salaries and pension of all the government employees, Rs15 percent ad-hoc relief allowance, adding the increase for grade1-19 employees besides DRA allowance.

    He said risk allowance of police officials from grade 7-16 have been increased and was brought at par of DRA in line with the police martyrs package.

    The Finance Minister Taimur Salim Jhagra said that Rs447.9 billion would be spent on salaries including Rs372.1 billion in settled districts and Rs75.8 billion through merged tribal districts while Rs107 billion on pension including Rs106 billion in settled districts and Rs one billion in merged tribal districts.

    READ MORE: Advance tax on immovable property purchase enhanced to 250% for non-filers

    He said 100 percent increase in pension expenditure have been witnessed in last couple of years, adding expenditure of pensions, which was only one percent of total KP budget expenditure in 2003-04 ie Rs0.87 billion has jumped to 14.7percent ie Rs90 billion in 2021-2022.

    READ MORE: Pakistan massively increases taxation on motor vehicles

    He said amendment in KP Civil Servant Act 1973 has been made under which contributory and provident fund were increased for newly recruited employees under contributory pension scheme under which either lumsum amount one time or long terms investment offer would be given to retired employees.

    As many as services of 63,0000 employees would be regularized including 675 adhoc doctors from July 1, 2002, regularization of 58,0000 teachers and 4079 employees of 128 projects of erstwhile Fata during 2022-2023.

    READ MORE: New rates of capital gain tax on disposal of securities

  • Khyber Pakhtunkhwa presents Rs1.33 trillion budget 2022-2023

    Khyber Pakhtunkhwa presents Rs1.33 trillion budget 2022-2023

    PESHAWAR: Khyber Pakthunkhwa government on Monday presented Rs1.332 trillion budget for fiscal year 2022-2023.

    The budget included an allocation of Rs1.11 trillion for settled districts and Rs223.1 billion for merged tribal districts.

    Presenting its fourth budget at Khyber Pakthunkhwa Assembly floor, Finance Minister Taimur Salim Jhagra said that the volume of the current budget is Rs913.8 billion including Rs789.8 billion for settled districts and Rs124 billion for merged tribal districts.

    READ MORE: Advance tax on immovable property purchase enhanced to 250% for non-filers

    He said total development budget of Khyber Pakthunkhwa was Rs418.2 billion including Rs319.2 billion for settled districts and Rs99 billion for merged tribal districts.

    Regarding revenue and receipts collection, the minister said that total receipts was estimated at Rs1,332 billion including Rs750.9 billion to be collected from federal taxes receipts and Rs68.6percent as one percent share of divisible pool on war on terror.

    He said Rs31 billion would be collected through oil and gas royalty and surcharge and Rs61.9 billion through net hydel power in accordance of MoU 2015-16 and arrears.

    READ MORE: Pakistan massively increases taxation on motor vehicles

    The minister said Rs85 billion would be collected through provincial tax and non-tax revenue, Rs4.3 billion under the head of foreign program assistance (FPA) for settled districts and Rs208.7 billion grant for merged tribal districts besides Rs212.7 billion receipts through other resources.

    The Finance Minister Taimur Salim Jhagra said that Rs447.9 billion would be spent on salaries including Rs372.1 billion in settled districts and Rs75.8 billion through merged tribal districts while Rs107 billion on pension including Rs106 billion in settled districts and Rs one billion in merged tribal districts.

    Besides salaries, he said Rs247.4billion would be spent on O&M, emergency and district expenditures, Rs111.4 billion on others current expenditures while volume of provincial development program including accelerated development program budget was Rs241 billion including Rs185 billion for settled districts and Rs56 billion for merged tribal districts while volume of total development budget was Rs383.5 billion including 319.2 billion for settled districts and Rs64.3billion for merged tribal districts.

    READ MORE: New rates of capital gain tax on disposal of securities

    Under foreign program assistance, Rs93.2 billion would be spent including Rs88.9 billion for settled districts and Rs4.3 billion for merged tribal districts while 8.3 billion would be received through Public Sector Development Program for settled districts of Khyber Pakthunkhwa.

    The Minister said that Rs26,458 million would be spent on agriculture, Rs4191 on Aukaf, Religious Affairs, Rs73 million on Bureau of Statistics, Rs71653 million on communication and works, Rs227,087 million for elementary and secondary education, Rs29203 million on energy and power,

    Rs4191 million for environment, Rs1607 million for excise and taxation, Rs32,446 million through finance, Rs6433 million through forestry, Rs6655 million through general administration, Rs205,725 million for health, Rs34,191 million through higher education, Rs101,572 million for home and Rs823 million for housing sectors.

    READ MORE: Pakistan slaps 45% corporate tax on banks

    Likewise, Rs4926 million were allocated for industries, Rs1808 million for information and public relations, Rs2990 million for information technology, Rs25725 million for irrigation, Rs1033 million for labour, Rs14377 million for law and justice, Rs22337 million for local government, Rs1426 million for mines and mineral, Rs64372 million for planning and development,

    Rs3616 million for population welfare, Rs23071 million for public health engineering, Rs30003 million for relief, rehabilitation and settlement, Rs3045 million revenue and estate, Rs6068 million for social welfare, Rs22017 million sports, culture and tourism, Rs2849 million through technical education, Rs12151 million for transport and Rs392 million for Zakat and Usher.

    Finance Minister Taimur Salim Jhagra said health department budget has been increased by Rs55 billion, elementary and secondary education by Rs47 billion, police by Rs14 billion and energy and power by Rs11 billion.

    The Minister announced Rs15percent increase in salaries and pension of all the government employees, Rs15 percent ad-hoc relief allowance, adding the increase for grade1-19 employees besides DRA allowance. He said risk allowance of police officials from grade 7-16 have been increased and was brought at par of DRA in line with the police martyrs package.

    Transport monetization and vehicle leasing policy, change of executive allowance to performance allowance, work from home on Fridays and introduction of fleet cards to save fuel and reduce risk of pilferage across all departments announced.

    Taimur Salim Jhagra said 100 percent increase in pension expenditure have been witnessed in last couple of years, adding expenditure of pensions, which was only one percent of total KP budget expenditure in 2003-04 ie Rs0.87 billion has jumped to 14.7percent ie Rs90 billion in 2021-22.

    He said amendment in KP Civil Servant Act 1973 has been made under which contributory and provident fund were increased for newly recruited employees under contributory pension scheme under which either lumsum amount one time or long terms investment offer would be given to retired employees.

    As many as services of 63,0000 employees would be regularized including 675 adhoc doctors from July 1, 2002, regularization of 58,0000 teachers and 4079 employees of 128 projects of erstwhile Fata during 2022-23.

    OPD services under Sehat Card Plus program would soon be launched in all Govt hospitals and patient can available free treatment up to Rs10 million, he said adding Rs25 billion were allocated for Sehat Plus Card through eight lakh patients were benefited during 2021-22.

    Following inclusion of liver transplant, he said five more chronic diseases including bone marrow transplant, sclerosis, cochlear implants, thalassemia and advance cancer coverage would be included in Sehat Card for which Rs2.5billion were allocated. He said that Rs53.6 billion earmarked for MTIs, allied and medical hospitals in Khyber Pakthunkhwa.

    Four new medical colleges at Dir, Buner, Charsadda and Haripur would be established besides setting up of four new MTIs at Fountains House Peshawar, Kohat Institute of Medical and Dental Sciences, DHQ Charassadda and Women Children Hospital and DHQ Haripur.

    As many as Rs3 billion were set aside for revamping of secondary care and service delivery while renovation of rehabilitation of 32 hospitals were completed.
    Besides allocation of Rs2.7 billion for 58 hospitals in 24 districts for secondary care hospital under Public Private Partnership, he said that 3000 more beds would be established while primary care revamping program carrying allocation Rs2125 million was producing excellent results.

    He said renovation of 700BHUs and RHCs costing Rs82.4 billion have been started while renovation of 500 facilities completed. He said Rs2 billion allocated for strengthening of 15 BHUs and RHCs in 15 districts provision of better services to people.

    He said Rs10 billion would be spent on provision of free medicines to people besides allocation of Rs500 million for LHS and LHWs in addition to 3500 additional LHWs recruitment and additional funds of Rs one billion funds for arrangements regarding eradication of polio in Bannu and Dera Ismail and Rs1.3 billion for launching of maternal ambulance service.

    Taimur Jhagra said KP Govt has decided to maintain tax rates of fiscal year 2021-22, adding 20pc relaxation would be provided for re-registration of motor vehicles or first registration and there would be not tax on land with full exemption from capital value tax (CVT) and registration fee.

    He announced students of elementary and secondary education are exempted from fee and exempted library, archives and hostels fees. The Minister claimed that tax rates of Khyber Pakthunkhwa Revenue Authority was minimum than other provinces of Pakistan.

    He said PFM (Public Financial Management) law was being introduced under Article 119 of the Constitution for bringing more transparency in the financial system. Insaf Food Cards program has been introduced under which Rs26 billion targeted subsidy would be provided to one million families of KP.

  • Advance tax on immovable property purchase enhanced to 250% for non-filers

    Advance tax on immovable property purchase enhanced to 250% for non-filers

    ISLAMABAD: Pakistan has announced a sharp increase in advance tax on purchase of immovable property to 250 per cent for persons not filing income tax returns.

    (more…)
  • Pakistan massively increases taxation on motor vehicles

    Pakistan massively increases taxation on motor vehicles

    ISLAMABAD: Pakistan has massively increased the amount of tax on purchase of motor vehicles from July 01, 2022.

    (more…)
  • New rates of capital gain tax on disposal of securities

    New rates of capital gain tax on disposal of securities

    ISLAMABAD: The government has proposed new rates of capital gain tax on disposal of securities traded at Pakistan Stock Exchange (PSX).

    Pakistan presented its federal budget on June 10, 2022 and introduced various taxation measures to boost revenue collection.

    READ MORE: Pakistan slaps 45% corporate tax on banks

    Through Finance Bill, 2022 proposed to revise the rates of capital gain tax for tax year 2023 and onwards.

    Following is the proposed rates of capital gain tax:

    S.NoHolding PeriodRate of Tax for Tax year 2023 and onwards
    (1)(2)(3)
    1.Where the holding period does not exceed one year15%
    2.Where the holding period exceeds one year but does not exceed two years12.5%
    3.Where the holding period exceeds two years but does not exceed three years10%
    4.Where the holding period exceeds three years but does not exceed four years7.5%
    5.Where the holding period exceeds four years but does not exceed five years5%
    6.Where the holding period exceeds five years but does not exceed six years2.5%
    7.Where the holding period exceeds six years0%
    8.Future commodity contracts entered into by members of Pakistan Mercantile Exchange5%”;

    The Federal Board of Revenue (FBR) collects capital gain tax on disposal of securities under Section 37A of the Income Tax Ordinance, 2001.

    Following is the text of Section 37A of Income Tax Ordinance, 2001:

    READ MORE: Tax rates for business individuals, AOPs during TY2023

    37A. Capital gain on disposal of securities.—(1) The capital gain arising on or after the first day of July 2010, from disposal of securities, other than a gain that is exempt from tax under this Ordinance, shall be chargeable to tax at the rates specified in Division VII of Part I of the First Schedule:

    Provided that this section shall not apply to a banking company and an insurance company.

    (1A) The gain arising on the disposal of a security by a person shall be computed in accordance with the following formula, namely: —

    A – B

    Where —

    (i) ‘A’ is the consideration received by the person on disposal of the security; and

    READ MORE: Pakistan reintroduces advance tax on foreign payments

    (ii) ‘B’ is the cost of acquisition of the security.

    (2) The holding period of a security, for the purposes of this section, shall be reckoned from the date of acquisition (whether before, on or after the thirtieth day of June, 2010) to the date of disposal of such security falling after the thirtieth day of June, 2010.

    (3) For the purposes of this section “security” means share of a public company, voucher of Pakistan Telecommunication Corporation, Modaraba Certificate, an instrument of redeemable capital,debt Securities, unit of exchange traded fund and derivative products.

    (3A) For the purpose of this section, “debt securities” means –

    READ MORE: Exchange companies to withhold tax on payment to MTOs

    (a) Corporate Debt Securities such as Term Finance Certificates (TFCs), Sukuk Certificates (Sharia Compliant Bonds), Registered Bonds, Commercial Papers, Participation Term Certificates (PTCs) and all kinds of debt instruments issued by any Pakistani or foreign company or corporation registered in Pakistan; and

    (b) Government Debt Securities such as Treasury Bills (T-bills), Federal Investment Bonds (FIBs), Pakistan Investment Bonds (PIBs), Foreign Currency Bonds, Government Papers, Municipal Bonds, Infrastructure Bonds and all kinds of debt instruments issued by Federal Government, Provincial Governments, Local Authorities and other statutory bodies.

    “Explanation: For removal of doubt it is clarified that derivative products include future commodity contracts entered into by the members of Pakistan Mercantile Exchange whether or not settled by physical delivery.”

    (3B) For the purpose of this section, “shares of a public company” shall be considered as security if such company is a public company at the time of disposal of such shares.

    (4) Gain under this section shall be treated as a separate block of income.

    (5) Notwithstanding anything contained in this Ordinance, where a person sustains a loss on disposal of securities in a tax year, the loss shall be set off only against the gain of the person from any other securities chargeable to tax under this section and no loss shall be carried forward to the subsequent tax year:

    Provided that so much of the loss sustained on disposal of securities in tax year 20l9 and onwards that has not been set off against the gain of the person from disposal of securities chargeable to tax under this section shall be carried forward to the following tax year and set off only against the gain of the person from disposal of securities chargeable to tax under this section, but no such loss shall be carried forward to more than three tax years immediately succeeding the tax year for which the loss was first computed.

    (6) To carry out purpose of this section, the Board may prescribe rules.

    The rate of tax to be paid under section 37A shall be as follows:—

  • Pakistan slaps 45% corporate tax on banks

    Pakistan slaps 45% corporate tax on banks

    ISLAMABAD: Pakistan has slapped corporate income tax at 45 per cent on banks, which is raised from 35 per cent.

    The country presented its federal budget on June 10, 2022 and introduced tax measures for boosting revenue collection.

    READ MORE: Tax rates for business individuals, AOPs during TY2023

    Through Finance Bill, 2022 the tax rate for banking companies have been proposed to increase to 45 per cent from existing 35 per cent.

    In this regard, the bill proposed amendment to Division II, Part I of First Schedule of the Income Tax Ordinance, 2001.

    Proposed Rates of Tax for Companies

    READ MORE: Pakistan reintroduces advance tax on foreign payments

    The rate of tax imposed on the taxable income of a company shall be as set out in the following Table, namely:-

    Type of CompanyRate of Tax
    Small company20%
    Banking company45%
    Any other company29%

    Following are the existing rates of tax for corporate entities for tax year 2022:

    (i) The rate of tax imposed on the taxable income of a company for the tax year 2007 and onward shall be 35%:

    Provided that the rate of tax imposed on the taxable income of a company other than a banking company, shall be 34% for the tax year 20145:

    READ MORE: Exchange companies to withhold tax on payment to MTOs

    Provided further that the rate of tax imposed on the taxable income of a company, other than a banking company, shall be 33% for the tax year 2015:

    “Provided further that the rate of tax imposed on taxable income of a company, other than banking company shall be 32% for the tax year 2016, 31% for tax year 2017, 30% for tax year 2018 and 29% for tax year 2019 and onwards.

    READ MORE: Salaried persons denied adjustments against deduction

    (iii) where the taxpayer is a small company as defined in section 2, tax shall be payable at the rate of 25%:

    Provided that for tax year 2019 and onwards tax rates shall be as set out in the following Table, namely:—

    Tax yearRate of Tax
    201924%
    202023%
    202122%
    202221%
    2023 and onwards20%”
  • Tax rates for business individuals, AOPs during TY2023

    Tax rates for business individuals, AOPs during TY2023

    ISLAMABAD: Finance Bill, 2022 has proposed to revise tax rates for business individuals and Association of Persons (AOPs) during Tax year 2023.

    The government presented its federal budget 2022/2023 and introduced various changes to taxation laws to ensure documentation and plug revenue leakages.

    READ MORE: Pakistan reintroduces advance tax on foreign payments

    Through Finance Bill, 2022 the basic exemption of tax on income of individuals and AOPs has been increased to Rs600,000 from Rs400,000.

    Following is the proposed tax card for business individuals and AOPs.

    READ MORE: Exchange companies to withhold tax on payment to MTOs

    Sr. No.Taxable IncomeRate of Tax
    1.Where taxable income does not exceed Rs. 600,000/0 per cent
    2.Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 800,0005 per cent of the amount exceeding Rs. 600,000
    3.Where taxable income exceeds Rs. 800,000 but does not exceed Rs. 1,200,000Rs. 10,000 + 12.5 per cent of the amount exceeding Rs. 800,000
    4.Where taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 2,400,000Rs.60,000 + 17.5 per cent of the amount exceeding Rs. 1,200,000
    5.Where taxable income exceeds Rs. 2,400,000 but does not exceed Rs. 3,000,000Rs. 270,000 + 22.5 per cent of the amount exceeding Rs. 2,400,000
    6.Where taxable income exceeds Rs. 3,000,000 but does not exceed Rs. 4,000,000Rs. 405,000 + 27.5 per cent of the amount exceeding Rs. 3,000,000
    7.Where taxable income exceeds Rs. 4,000,000 but does not exceed Rs. 6,000,000Rs. 680,000 + 32.5 per cent of the amount exceeding Rs. 4,000,000
    8.Where taxable income exceeds Rs. 6,000,000Rs. 1,330,000 + 35 per cent of the amount exceeding Rs. 6,000,000.”

    Following are the existing rates of tax for Individuals and Association of Persons for tax year 2022:

    READ MORE: Salaried persons denied adjustments against deduction

    (1) Subject to clause (2), the rates of tax imposed on the income of every individual and association of persons except a salaried individual shall be as set out in the following Table, namely:—

    1. Where taxable income does not exceed Rs. 400,000: the tax rate shall be zero per cent.

    2. Where the taxable income exceeds Rs. 400,000 but does not exceed Rs. 600,000: the tax rate shall be 5 per cent of the amount exceeding Rs. 400,000.

    3. Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000: the tax rate shall be Rs. 10,000 plus 10 per cent of the amount exceeding Rs. 600,000.

    4. Where taxable income exceeds Rs.1,200,000 but does not exceed Rs. 2,400,000: the tax rate shall be Rs. 70,000 plus 15 per cent of the amount exceeding Rs. 1,200,000.

    READ MORE: New ADR mechanism introduced to facilitate taxpayers

    5. Where taxable income exceeds Rs. 2,400,000 but does not exceed Rs. 3,000,000: the tax rate shall be Rs. 250,000 plus 20 per cent of the amount exceeding Rs. 2,400,000.

    6. Where taxable income exceeds Rs. 3,000,000 but does not exceed Rs. 4,000,000: the tax rate shall be Rs. 370,000 plus 25 per cent of the amount exceeding Rs. 3,000,000.

    7. Where taxable income exceeds Rs. 4,000,000 but does not exceed Rs. 6,000,000: the tax rate shall be Rs. 620,000 plus 30 per cent of the amount exceeding Rs. 4,000,000.

    8. Where taxable income exceeds Rs. 6,000,000: the tax rate shall be Rs. 1,220,000 plus 35 per cent of the amount exceeding Rs. 6,000,000.

  • Pakistan reintroduces advance tax on foreign payments

    Pakistan reintroduces advance tax on foreign payments

    ISLAMABAD: Pakistan has reintroduced advance tax on foreign payments made through credit, debit or prepaid cards. The advance tax has been revived through Finance Bill, 2022.

    (more…)
  • Exchange companies to withhold tax on payment to MTOs

    Exchange companies to withhold tax on payment to MTOs

    ISLAMABAD: Exchange companies have been brought under the ambit of withholding tax and now they are required to deduct tax on payment to international money transfer operators (MTOs).

    The change has been proposed through budget 2022/2023, which was presented on June 10, 2022.

    Through Finance Bill, 2022 amendments suggested to Section 152 of the Income Tax Ordinance, 2001.

    READ MORE: Salaried persons denied adjustments against deduction

    According to amendments, new sub-sections have been proposed:

    “(1DC) Every exchange company licensed by the State Bank of Pakistan shall deduct tax at the time of making payment of service charges or commission or fee, by whatever name called, to the global money transfer operators, international money transfer operators or such other persons engaged in international money transfers or cross-border remittances for facilitating outward remittances, at the rates given in Division IV, Part I of the First Schedule:

    READ MORE: New ADR mechanism introduced to facilitate taxpayers

    Provided that where such person retains service charges or commission or fee, by whatever name called from the amount payable to the exchange company on any account, the exchange company shall be deemed to have paid the service charges or commission or fee, by whatever name called and the exchange company shall collect the tax accordingly.

    (1DD) Every banking company while making payment to card network company or payment gateway or any other person, of any transaction fee or licensing fee or service charges or commission or fee by whatever name called or interbank financial telecommunication services, shall deduct tax at the rates given in Division IV, Part I of the First Schedule:

    READ MORE: FBR to disable mobile SIMs on non-filing of tax returns

    Provided that where card network company or payment gateway or any other person retains money in relation to aforementioned services from the amount payable to the banking company on any account, the banking company shall be deemed to have paid the amount and the banking company shall collect the tax accordingly.”;

    According to Income Tax Ordinance, 2001 updated up to June 30, 2021, the rate of tax imposed under section 6 on payments to non-residents shall be 15 per cent of the gross amount of the royalty or fee for technical services and 5 per cent of the gross amount of the fee for offshore digital services.

    READ MORE: Pakistan amends tax laws to legalize money transfers