The Federal Board of Revenue (FBR) has disclosed the tax rates applicable to profit on debt under section 7B of the Income Tax Ordinance, 2001, for the tax year 2022.
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Rate of dividend tax for Tax Year 2022
The tax rates for dividend tax imposed under section 5 of the Income Tax Ordinance, 2001 for tax year 2022 under the First Schedule of the Income Tax Ordinance, 2001.
The Federal Board of Revenue (FBR) issued the Income Tax Ordinance, 2001 updated up to June 30, 2021. The Ordinance incorporated amendments brought through Finance Act, 2021.
Following are the rates of dividend tax:
The rate of tax imposed under section 5 on dividend received from a company shall be-
(a) 7.5% in the case of dividends paid by Independent Power Producers where such dividend is a pass through item under an Implementation Agreement or Power Purchase Agreement or Energy Purchase Agreement and is required to be re-imbursed by Central Power Purchasing (CPPA-G) or its predecessor or successor entity.
(b) 15% in mutual funds, Real Estate Investment Trusts and cases other than those mentioned in clauses (a) and (c).
(c) 25% in case of a person receiving dividend from a company where no tax payable by such company, due to exemption of income or carry forward of business losses under Part VIII of Chapter III or claim of tax credits under Part X of Chapter III.
(Disclaimer: The text of the above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)
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Indenters not paying tax despite rate reduction: SRB
KARACHI: Khalid Mehmood, Chairman, Sindh Revenue Board (SRB) on Friday said that many indenters are still not paying tax and opted to approach court.
SRB chairman stated this while sharing views with the members of Karachi Chamber of Commerce and Industry (KCCI).
Khalid Mehmood said that sincere efforts were made to resolve the indenters issue whose tax was reduced from 13 percent to 3 percent yet, many indenters were still reluctant to pay tax and have gone into litigations. “If they (Indenters) have any other feasible option, it can be shared with SRB and we will take it into consideration,” he assured.
He said that point of sale measure was being taken to capture sales of restaurants, beauty parlors and other outlets where a large number of cash transactions were taking place. “In this regard, we will be requiring your cooperation as it will be a substantive move,” he added.
Chairman SRB said: “Instead of being a typically strict tax collecting authority, we try our best to make SRB a taxpayers’ friendly institution and we have succeeded in attaining this objective to a certain extent.
“Even in those matters in which there were differences between the SRB and the business community, we usually act leniently in terms of enforcement and the Board has been overall enjoying good relations with the business community of Karachi.”
He added that any unwarranted notice received by members of the business community can be brought to SRB high-ups’ notice who are always available to listen to and amicably resolve the issues.
Chairman BMG Zubair Motiwala, while congratulating SRB Chairman on achieving record tax collection of Rs128 billion, stated that there was a huge potential for further growth as SRB has created an enabling and cordial environment in which the taxpayers were being facilitated as much as possible which was a very nice approach.
He stressed that out of a total revenue of Rs128 billion, Karachi must be contributing somewhere around Rs110 billion and out of this huge contribution, the Sindh government should look into the possibility of spending half of the amount on development of Karachi.
He further pointed out that the Worker Welfare Fund (WWF), which was either being submitted to SRB or FBR, was a serious issue that stands unresolved to date. Many taxpayers, who submit it to FBR, adjust WWF in Income Tax Returns but those taxpayers, who submit it to SRB, cannot carry out adjustment in IT returns.
Hence, the SRB and FBR will have to sit together to deal with this issue as it puts the business community in confusing situation, he added.
He further stated that sales tax on Exports was not being charged anywhere around the world hence it should not be charged here as well because all the services including shipping lines and terminals operators etc. were being availed for exports. “SRB must also rationalize its tax rates in consultation with KCCI as there was plenty of space available in numerous sectors where the tax rate can either be reduced or enhanced”, he opined.
Vice Chairman BMG Haroon Farooki, in his remarks, stated that the business community faces a lot of problems and remains confused on various occasions when parallel taxes were being demanded by the FBR and SRB as well and both claim that these taxes fall under their domain. “This clash between the two tax collecting authorities puts legitimate taxpayers in a discomfortable position who sometimes even have to go to courts to settle the issues but it is high time that FBR and SRB must sit together to decide their domains in order to set the loyal taxpayers free from all the trouble”, he added.
He mentioned that taxation issues of indenters, security agencies and travels agents etc. have still not been addressed at SRB level which require attention.
Vice Chairman BMG Jawed Bilwani stressed that although Karachi contributes 95 percent revenue to SRB but sector-wise and city-wise breakup was unavailable. “SRB should look into the possibility of publicizing this important info so that we could examine the statistics and give inputs on where the tax rate needs to be enhanced and where it has to be reduced.”
President KCCI Muhammad Idrees, while welcoming Chairman SRB, stated that since Khalid Mehmood assumed charge, SRB’s revenue has been constantly increasing every year and it was heartening to see that most of the revenue was being contributed by the business & industrial community of Karachi. “We have no problem in contributing so much and we can contribute even more but the funds being generated from Karachi must be utilized on the infrastructure of this city which was in bad shape.”
He appreciated the support and cooperation being extended by Chairman SRB who has promptly resolved numerous issues highlighted by KCCI.
Chairman Businessmen Group (BMG) Zubair Motiwala, Vice Chairmen BMG Haroon Farooki and Jawed Bilwani, President KCCI Muhammad Idrees, Senior Vice President Abdul Rehman Naqi, Advisor SRB Mushtaq Kazmi and KCCI Managing Committee Members attended the meeting.
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Hopes for further return filing date extension
ISLAMABAD: Today October 15, 2021 is the last date for filing return or income for tax year 2021. However, a large number persons still require to file their returns. They hope the FBR may further extend the last date beyond October 15, 2021.
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GST exemption on various goods may be withdrawn
Pakistan’s Federal Board of Revenue is likely to withdraw exemption and concession of general sales tax (GST) granted on many consumable items.
The consumption tax may be withdrawan on the supply of goods to generate an estimated revenue of Rs334 billion, news reports suggested.
The exemption of GST may be withdrawn on supplies of various local and imported goods. The exemption and concession of consumption tax may continue on basic food items.
The report suggested that Personal Income Tax (PIT), there are 11 slabs and one proposal under consideration is to bring down slabs to 6 or 7 where the minimum taxable ceiling of Rs0.6 million might be adjusted upward while the rate of higher-income brackets might be increased.
The hike in power tariff to the tune of Rs1.40 per unit might be notified after the agreement with the IMF.
Federal Minister for Finance Shaukat Tarin is expected to hold a meeting with the IMF’s Managing Director (MD) Kristalina Georgieva on October 15, 2021 in Washington, DC. However, things are still unclear whether Pakistan and the IMF will be able to strike a staff-level agreement or not. The review talks may be extended if both sides remained unable to strike any staff-level agreement on the completion of the sixth and seventh reviews under the $6 billion Extended Fund Facility (EFF).
Sources said that the IMF was advising stringent taxation measures but Pakistani authorities were making last-ditch efforts to convince the IMF for delaying taxation measures on account of withdrawal of sales tax exemptions and adjustment into Personal Income Tax till the announcement of the next budget 2022-23 or implementation of these steps in a staggered manner.
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Rate of super tax for Tax Year 2022
The Federal Board of Revenue (FBR) has defined the super tax rate for the tax year 2022 under the First Schedule of the Income Tax Ordinance, 2001.
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Rates of income tax for companies during Tax Year 2022
The tax rates for corporate entities for tax year 2022 under the First Schedule of the Income Tax Ordinance, 2001.
The Federal Board of Revenue (FBR) issued the Income Tax Ordinance, 2001 updated up to June 30, 2021. The Ordinance incorporated amendments brought through Finance Act, 2021.
Following are the rates of tax for corporate entities:
(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:
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.
(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 year Rate of Tax 2019 24% 2020 23% 2021 22% 2022 21% 2023 and onwards 20%”; (Disclaimer: The text of the above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)
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Rate of tax for salaried persons for tax year 2022
The tax rates for salaried persons for tax year 2022 under the First Schedule of the Income Tax Ordinance, 2001.
The Federal Board of Revenue (FBR) issued the Income Tax Ordinance, 2001 updated up to June 30, 2021. The Ordinance incorporated amendments brought through Finance Act, 2021.
Following are the rates of tax for salaried persons during tax year 2022 (July 01, 2021 – June 30, 2022):
(2) Where the income of an individual chargeable under the head “salary” exceeds seventy-five per cent of his taxable income, the rates of tax to be applied shall be as set out in the following table, namely:—
TABLE S. No. Taxable income Rate of tax (1) (2) (3) 1. Where taxable income does not exceed Rs. 600,000 0% 2. Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000 5% of the amount exceeding Rs. 600,000 3. Where taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 1,800,000 Rs. 30,000 plus 10% of the amount exceeding Rs. 1,200,000 4. Where taxable income exceeds Rs. 1,800,000 but does not exceed Rs. 2,500,000 Rs. 90,000 plus 15% of the amount exceeding Rs. 1,800,000 5. Where taxable income exceeds Rs.2,500,000 but does not exceed Rs. 3,500,000 Rs. 195,000 plus 17.5% of the amount exceeding Rs. 2,500,000 6. Where taxable income exceeds Rs. 3,500,000 but does not exceed Rs. 5,000,000 Rs. 370,000 plus 20% of the amount exceeding Rs. 3,500,000 7. Where taxable income exceeds Rs. 5,000,000 but does not exceeds Rs. 8,000,000 Rs. 670,000 plus 22.5% of the amount exceeding Rs. 5,000,000 8. Where taxable income exceeds Rs. 8,000,000 but does not exceeds Rs. 12,000,000 Rs. 1,345,000 plus 25% of the amount exceeding Rs. 8,000,000 9. Where taxable income exceeds Rs. 12,000,000 but does not exceeds Rs. 30,000,000 Rs. 2,345,000 plus 27.5% of the amount exceeding Rs. 12,000,000 10. Where taxable income exceeds Rs. 30,000,000 but does not exceeds Rs. 50,000,000 Rs. 7,295,000 plus 30% of the amount exceeding Rs. 30,000,000 11. Where taxable income exceeds Rs. 50,000,000 but does not exceeds Rs. 75,000,000 Rs. 13,295,000 plus 32.5% of the amount exceeding Rs. 50,000,000 12. Where taxable income exceeds Rs. 75,000,000 Rs. 21,420,000 plus 35% of the amount exceeding Rs. 75,000,000] (Disclaimer: The text of the above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)
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Tax rates for individuals, AOPs for Tax Year 2022
The tax rates for individuals and Association of Persons (AOPs) for tax year 2022 under the First Schedule of the Income Tax Ordinance, 2001.
The Federal Board of Revenue (FBR) issued the Income Tax Ordinance, 2001 updated up to June 30, 2021. The Ordinance incorporated amendments brought through Finance Act, 2021.
Following are the rates of tax for Individuals and Association of Persons:
(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:—
TABLE S. No. Taxable income Rate of tax (1) (2) (3) 1. Where taxable income does not exceed Rs. 400,000 0% 2. Where the taxable income exceeds Rs. 400,000 but does not exceed Rs. 600,000 5% of the amount exceeding Rs. 400,000 3. Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000 Rs. 10,000 plus 10% of the amount exceeding Rs. 600,000 4. Where taxable income exceeds Rs.1,200,000 but does not exceed Rs. 2,400,000 Rs. 70,000 plus 15% of the amount exceeding Rs. 1,200,000 5. Where taxable income exceeds Rs. 2,400,000 but does not exceed Rs. 3,000,000 Rs. 250,000 plus 20% 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 Rs. 370,000 plus 25% 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 Rs. 620,000 plus 30% of the amount exceeding Rs. 4,000,000 8. Where taxable income exceeds Rs. 6,000,000 Rs. 1,220,000 plus 35% of the amount exceeding Rs. 6,000,000 (Disclaimer: The text of the above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)
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Trade discount should be displayed on invoice: FBR
ISLAMABAD: The Federal Board of Revenue (FBR) on Thursday said that trade discount if any to be given by a retailer has to be depicted on the invoice horizontally i.e. from left to right
The FBR on August 9, 2021 issued SRO 1006(I)/2021 and specified standardized format for sales tax invoice detailing minimum requirement for the integrated point of sale (POS) system.
The definition of trade discount as mentioned in the value of supply in sub-section (46) of Section 2 the Sales Tax Act, 1990 is meant for Business to Business transactions and does not cover retail sector and the business to consumer transaction.
The FBR said it had received various representations from the taxpayers and Bar Councils seeking clarification of the term ‘trade discount’ as stated in sub-section (46) of Section 2 of the Sales Tax Act, 1990 whether the term also covers ‘cash discount’ given by retailers to end consumers, for the purpose of depiction in the standardized Sales Tax invoice under SRO 1006(1)/2021 dated 09.08.2021.
The matter has been examined by the Board, it is clarified that the discount if any to be given by a retailer has to be depicted on the invoice horizontally i.e. from left to right.
The captions such as total, sales tax paid, discount allowed appearing at the bottom of the invoice are standalone notations and do not necessarily add or subtract one another.