ISLAMABAD, February 20, 2024 – The Federal Board of Revenue (FBR) has issued a clarification stating that female consumers can present the CNIC of their husband or father when making purchases above Rs50,000.
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Pakistan Revenue delivers the latest taxation news, covering income tax, sales tax, and customs duty. Stay updated with insights on tax policies, regulations, and financial developments in Pakistan.
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FBR issues withholding tax rates for sale, purchase of immovable properties
KARACHI: Federal Board of Revenue (FBR) has notified withholding tax rate for active and non-active taxpayers at the time of sale and purchase of immovable properties as amended through Finance Act, 2019 and applicable from July 01, 2019.
The FBR said that every person registering, recording or attesting or transfer including local authorities, housing authorities, housing society cooperative society and registrar or properties shall collect withholding tax under Section 236C of Income Tax Ordinance, 2001 from seller of immovable
property at the time of registering, recording or attesting the transfer.The withholding tax rate shall be one percent of gross amount of the considering received in case of active taxpayer, who filed their income tax return within due date.
Persons not appearing in the Active Taxpayers’ List : The applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the
Ordinance), i.e 2 percent of the gross amount of the consideration received.The tax shall be minimum tax if property is acquired and disposed off within the same tax year; Otherwise adjustable.
Advance tax, under this section, is not be collected if the immovable property is held for a period exceeding five25 years.
The FBR said that every person registering, recording or attesting or Transfer including local authorities, housing authorities, Housing Society, Co-operative Society and registrar or properties shall collect adjustable withholding tax from the purchaser of immovable properties at the time of registering, recording of immovable properties under Section 236K of Income Tax Ordinance, 2001.
Under Section 236K(1) the tax rate shall be one percent of the fair market value for active taxpayers.
Persons not appearing in the Active Taxpayers’ List : The applicable tax rate is to be increased by 100% (Rule-1 of Tenth Schedule to the Ordinance), i.e 2 percent of the fair market value.
Advance Tax on payment of installment in respect of purchase of allotment of immovable property where transfer is to be effected after making payment of all installments Under Section 236K (3) the tax rate shall be one percent of the fair market value.
Persons not appearing in the Active Taxpayers’ List : The applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e 2 percent of the fair market value.
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No compromise on documentation of economy: FBR chairman
ISLAMABAD: Shabbar Zaidi, Chairman, Federal Board of Revenue (FBR) on Friday said that the government will not compromise documentation of economy by surrendering condition of CNIC on purchases.
He said that the condition of CNIC had been enforced on purchases above Rs50,000.
Speaking at a seminar organized by Sustainable Development Policy Initiative (SDPI) on Wednesday, he said that priority of the government was to enhance the tax net and expend tax base to documenting the country’s economy. And taxation is the only way to forward for equitable distribution of wealth, as we cannot have stabilized and equitable society unless we have a fare taxation system, he added.
The FBR chairman said that due to presumptive tax regime, we actually dissociated the taxation from the economy, where taxing the real income was out of question.
The incumbent government and the International Monitory Fund (IMF) are on the same page, as there was no disagreement by the government on the measures proposed by the IMF, especially the taxation measure, he said.
The chairman said that the government would not bow down against the pressure, protests and lame excuses of the businesses and industries.
Over the decades the policies of the successive governments make Pakistan a trading state rather a sami-manufacturing state, where the country is importing everything from mineral water to foods items and never worked-out on import substitution.
While raising the concerns over the open transit trade agreement with Afghanistan, he said the agreement was being exploited and abused by the smugglers which negatively impacted the local industry.
Pakistan needed to review this agreement and should take stringent measures to control illicit trade on Pak-Afghan border, he said.
There are around 100 thousand companies registered with the government of Pakistan, where only 60 thousands file their returns, which shows the level of tax compliance.
He said the measures taken in the current federal budget would fundamentally change the course of history of Pakistan.
The government was taking steps to redress the institutional corruption through automation of the taxation system, the Chairman FBR said.
He said that it is his responsibility to improve the tax base under the leadership of Prime Minister Imran Khan.
Hawala and Hundi have inflicted a huge loss on the country’s economy,” he said and added measures were being taken to include the middle class in the tax net.
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Pakistan Customs seizes huge quantity of Indian white sugar
ISLAMABAD: Pakistan Customs has seized huge quantity of Indian origin white sugar, which was to be used in Afghanistan.
Pakistan Customs Directorate General of Afghan Transit has seized a huge number of Indian origin consignments mis-declared as ‘White Sugar’, destined to be consumed in Afghanistan, said a statement on Friday.
After confirmation through laboratory tests, the sugar is found to be “unfit for human consumption. So far 4472 Metric Tons in172 Containers out of 258 Containers have been tested by Laboratories and reported as ‘unfit for human consumption’, the rest of the 2236 Metric Tons (86 containers) are under investigation, the statement said.
The harmful intake of this ‘expired sugar’ emanating foul smell and having turned brownish in colour would have seriously endangered the health of Afghan nationals had it made its way to the markets in Afghanistan.
In continuing to play its mandated role in ‘Protection of Society’, Customs at the operational level is further enhancing its enforcement efforts and information network, without compromising on trade facilitation.
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Withholding Tax Card: Non-ATL to pay up to 30pc tax on profit from bank deposits, saving schemes
ISLAMABAD: Federal Board of Revenue (FBR) has issued withholding tax card for tax year 2019/2020 effective from July 01, 2019 under which persons receiving profit from bank deposits or investment in national saving schemes shall pay up to 30 percent, if not on the Active Taxpayers List (ATL).
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RTO-II starts return filing facilitation drive next week
KARACHI: Regional Tax Office (RTO) –II Karachi to launch drive from next week in order to facilitate people to file their annual income tax returns.
FBR teams will set up camp offices at large corporate and government offices besides visiting markets and shopping plazas to encourage salary and business individuals to file their returns, said Badaruddin Ahmed Qureshi, Chief Commissioner, Inland Revenue, RTO-II, Karachi at a press conference on Friday.
The chief commissioner said that the purpose of the facilitation drive was to achieve 5 million income tax return filers during next few years. “The FBR has already received over 2.1 million income tax returns for tax year 2018,” the chief commissioner said.
He further added that the last date for filing income tax returns for tax year 2018 had been extended up to August 02, 2019.
He said that in order to achieve five million-milestone the FBR launched several measures to encourage / force persons having taxable income to file their returns.
The chief commissioner said that in first phase the RTO Karachi would ask large corporate entities and provincial departments to assure return filing by their employees having taxable income.
The tax office identified that employees of large organizations such as Pakistan International Airlines (PIA), National Bank of Pakistan (NBP), Pakistan Railways (PR) had taxable income but were not filing their income tax returns.
He said that the RTO-II Karachi would set up camp offices at various organizations for the enforcement of return filing. The camp offices would be set up at PIA, NBP, SSGC, Police, KMC, Water Board, Sindh Building Control Authority etc.
The chief commissioner said that the office had received details of doctors. He said that Pakistan Medical and Dental Council (PMDC) had 68,000 registered doctors out of which only 6,500 were filing annual income tax returns.
The chief commissioner said that it would be difficult to conceal transactions in future as FBR with the help of other regulators had established electronic system for information sharing.
The chief commissioner said that the FBR was facing enforcement problems due to human resource capacity but in order to ensure compliance a NGO was being engaged for the task of return filing.
He said that the tax office had get volunteers from the NGO would file returns of those who did not want to pay fee of lawyers.
A training session for those volunteers had been held recently at the tax office.
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FBR redeploys 1,650 customs officials to curb smuggling
ISLAMABAD: The Customs Wing has re-deployed and transferred 1,650 official positions to meet the challenging revenue target and particularly to control smuggling.
A statement said that in this context, a total of 180 posts in BS-16 have been re-designated while 1,568 posts in BS-16 have been redeployed across Pakistan. This shake up has not been kept limited to low grade positions but also 84 posts in BS-17 to BS-21 have also been re-deployed.
The bulk of the re-deployed customs officers have been shifted to strengthen the Customs enforcement side.
The transfer and posting orders have been issued. As a consequence of this re-deployment the Torkham corridor will become operational round the clock. The orders will enable the government to meet the demand from trade and industry to curb smuggling.
Customs automation efforts have lately been enabling it to handle more trade efficiently and reduce its reliance on human interface. Under Prime Minister’s instructions the Chairman Syed Shabbar Zaidi has instructed Customs to improve ease of doing business by expediting initiatives like implementation of WeBOC-Glo, ITTMS and trade related Pakistan Single Window.
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Withholding Tax Card: Tax rates on salary income
KARACHI: Federal Board of Revenue (FBR) has issued withholding tax card for tax year 2019/2020 effective from July 01, 2019 under which every employer paying salary to employees above threshold income shall deduct withholding tax.
According to official documents made available to PkRevenue.com, the FBR said that every person responsible for paying salary to an employee shall deduct tax from the amount paid under Section 149 of Income Tax Ordinance, 2001.
As per Finance Act, 2019, the provisions of newly inserted 10th schedule of the Income Tax Ordinance, 2001 shall not apply on tax deducted under section 149. Under the Tenth Schedule the withholding tax so collected shall be increased by 100 percent in case of persons not appearing on the Active Taxpayers List (ATL).
As per Finance Act, 2019, the salary slabs as well as tax rates have been revised with effect from 01.07.2019. As such all withholding tax agents disbursing salary are required to implement the revised tax rates from the same date.
Following are the salary slabs and rates on annual salary income:
1. Where taxable income does not exceed Rs. 600,000: the tax rate shall be 0 percent
2. Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000: the tax rate shall be 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: the tax rate shall be 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: the tax rate shall be 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: the tax rate shall be 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: the tax rate shall be 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 exceed Rs. 8,000,000: the tax rate shall be 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 exceed Rs. 12,000,000: the tax rate shall be 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 exceed Rs.30,000,000: the tax rate shall be 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 exceed Rs.50,000,000: the tax rate shall be 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 exceed Rs.75,000,000: the tax rate shall be Rs. 13,295,000 plus 32.5% of the amount exceeding Rs. 50,000,000
12. Where taxable income exceeds Rs.75,000,000: the tax rate shall be Rs. 21,420,000 plus 35% of the amount exceeding Rs 75,000,000″;
The FBR said that every person responsible for making payment for directorship fee or fee for attending board meeting or such fee by whatever name called under Section 149(3) of Income Tax Ordinance, 2001 shall collect 20 percent of gross amount paid.
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Withholding Tax Card: non-ATL persons to pay 30pc tax on dividend income
KARACHI: Federal Board of Revenue (FBR) has issued withholding tax card for tax year 2019/2020 effective from July 01, 2019 under which person not appearing on the Active Taxpayers List (ATL) shall pay up to 30 percent on dividend income.
According to documents made available to PkRevenue.com, the FBR said that every person paying dividend shall collect withholding tax under Section 150 of the Income Tax Ordinance, 2001 at the time the dividend is actually paid.
The following rates shall be applicable for tax year 2019/2020:
(a) In the case of dividend paid by Independent Power Purchasers (IPPs) whereas such dividend is a pass through item under an Implementation Agreement or Power Purchase Agreement or Energy Purchase Agreement and is required to be reimbursed by Central Power Purchasing Agency (CPPA-G) or its predecessor or successor entity:
The tax rate shall be 7.5 percent and in case persons not appearing in the ATL the applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 15 percent.
(b) In cases other than mentioned at (a) above the tax rate shall be 15 percent and if persons not appearing in the Active Taxpayers’ List the rate of tax required to be deducted/collected, as the case may be, is to be increased by 100 percent of the above (as specified in the First Schedule to the Income Tax Ordinance, 2001 (updated as per Finance Act, 2019), i.e. 30 percent.
The FBR further said that special purpose vehicle, company shall collect withholding tax under Section 150A of Income Tax Ordinance, 2001 from Sukuk holders on payment of gross amount of return on investment.
On Payment of return on investment in Sukuks:
a) In case the Sukuk- holder is a company, the tax rate shall be 15 percent and if persons not appearing in the Active Taxpayers’ List the applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 30 percent.
b) In case the Sukuk – holder is an individual or an association of person, if the return on investment is more than one million, the tax rate shall be 12.5 percent and if persons not appearing in the Active Taxpayers’ List then the applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 25 percent.
c) In case the Sukuk – holder is an individual and an association of person, if the return on investment is less than one million, the tax rate shall be 10 percent and if persons not appearing in the Active Taxpayers’ List then the applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 20 percent.
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Withholding Tax Card: Tax rates on imports of goods for ATL, non-ATL persons
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Withholding Tax Card: Tax rates on imports of goods for ATL, non-ATL persons
KARACHI: Federal Board of Revenue (FBR) has issued withholding tax rates on imports of goods for persons appearing on Active Taxpayers List (ATL) and for persons not on ATL under Section 148 of Income Tax Ordinance, 2001 for tax year 2019/2020 effective from July 01, 2019.
According to documents made available to PkRevenue.com the FBR said that the collector of customs shall collect the withholding tax rate at the prevailing rates from persons on the Active Taxpayers List (ATL) and double amount of tax from those persons, who are not on the ATL.
The FBR said that 1 percent of the import value increased by Custom duty, sales tax and federal excise duty shall be collected. And in case persons not appearing in the Active Taxpayers’ List : The applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 2 percent of the import value increased by Custom –duty, sales tax and federal excise duty.
Tax to be collected from every importer of goods on the value of goods.
1 (i) Industrial undertaking importing remeltable steel (PCT Heading 72.04) and directly reduced iron for its own use;
(ii) Persons importing potassic of Economic Coordination Committee of the Cabinet’s decision No. ECC-155/12/2004 dated the 9th December, 2004
(iii) Persons importing Urea;
(iv) Manufactures covered under Notification No. S.R.O 1125(I)/2011 dated the 31st December, 2011 and importing items covered under S.R.O 1125(I)/2011 dated 31st December, 2011.
(v) Persons importing Gold; and
(vi) Persons importing Cotton
(vii) Persons importing LNG.
Minimum Tax [Section 148(7)]
The tax required to be collected under this section shall be minimum tax on the income of importer arising from the imports subject to sub-section (1) of this section and this sub-section shall not apply [i.e Adjustable] in the case of Import of:a. Raw material, plant, equipment & parts by an industrial undertaking for its own use;
b. [motor vehicle] in CBU condition by manufacturer of motor vehicle].
c. Large import houses as defined / explained in 148(7)(d)
d. A foreign produced film imported for the purposes of screening and viewing]
The tax collected under this section at the time of import of ships by ship-breakers shall be minimum tax. [Section 148(8A)]
Industrial undertaking importing Plastic raw material (PCT Heading 39.01 to 39.12) for its own use, the tax rate shall be
1.75 percent of the import value as increased by Custom-duty, sales tax and federal excise duty
Persons not appearing in the Active Taxpayers’ List :
The applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 3.5 percent of the import value increased by Custom –duty, sales tax and federal excise duty.
2. Persons importing pulses shall pay 2 percent of the import value as increased by Custom-duty, sales tax and federal excise duty.
Persons not appearing in the Active Taxpayers’ List :
The applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 4 percent of the import value increased by Custom –duty, sales tax and federal excise duty.
3. Commercial importers covered under Notification No. S.R.O 1125(I)/2011 dated the 31st December, 2011 and importing items covered under S.R.O 1125(I)/2011 dated the 31st December, 2011, shall pay 3 percent of the import value as increased by custom-duty sales tax and federal excise duty.
Persons not appearing in the Active Taxpayers’ List :
The applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 6 percent of the import value increased by Custom –duty, sales tax and federal excise duty.
Commercial Importer importing Plastic raw material (PCT Heading 39.01 to 39.12) for its own use shall pay 4.5 percent of the import value as increased by Custom-duty, sales tax and federal excise duty.
Persons not appearing in the Active Taxpayers’ List :
The applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 9 percent of the import value increased by Custom –duty, sales tax and federal excise duty.
4. Persons importing coal shall pay 4 percent.
Persons not appearing in the Active Taxpayers’ List :
The applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 8 percent of the import value increased by Custom –duty, sales tax and federal excise duty.
5. Persons importing finished pharmaceutical products that are not manufactured otherwise in Pakistan as certified by the Drug Regulatory of Pakistan, shall pay 4 percent.
Persons not appearing in the Active Taxpayers’ List :
The applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 8 percent of the import value increased by Custom –duty, sales tax and federal excise duty.
6. Ship breakers on import of ship shall pay 4.5 percent.
Persons not appearing in the Active Taxpayers’ List :
The applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 9 percent of the import value increased by Custom –duty, sales tax and federal excise duty.
7. Industrial undertakings not covered under S.No 1 to 6 shall pay 5.5 percent.
Persons not appearing in the Active Taxpayers’ List :
The applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 11 percent of the import value increased by Custom –duty, sales tax and federal excise duty.
8. Companies not covered under S. Nos. 1 to 7 shall pay 5.5 percent.
Persons not appearing in the Active Taxpayers’ List :
The applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 11 percent of the import value increased by Custom –duty, sales tax and federal excise duty.
9. Persons not covered Under S.Nos1 to 8 shall pay 6 percent.
Persons not appearing in the Active Taxpayers’ List :
The applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 12 percent of the import value increased by Custom –duty, sales tax and federal excise duty.
On Import of Mobile Phones by any Person (individual, AOP, Company) :
C&F Value of Mobile Phone (in USD ($) ) Tax (in Rs)
1. Up to $30 the tax rate shall be Rs. 702. Exceeding $30 & up to $100 the tax rate shall be Rs. 730
3. Exceeding $100 & up to $200 the tax rate shall be Rs. 930
4.Exceeding $200 & up to $350 the tax rate shall be Rs. 970
5.Exceeding $350 & up to $500 the tax rate shall be Rs. 3,000
6.Exceeding $500 the tax rate shall be Rs. 5,200.
Persons not appearing in the Active Taxpayers’ List :
The applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e.C&F Value of Mobile Phone (in USD ($) ) Tax (in Rs)
1. Up to $30 the tax rate shall be Rs. 140
2. Exceeding $30 & up to $100 the tax rate shall be Rs. 1,460
3. Exceeding $100 & up to $200 the tax rate shall be Rs. 1,860
4.Exceeding $200 & up to $350 the tax rate shall be Rs. 1,940
5.Exceeding $350 & up to $500 the tax rate shall be Rs. 6,000
6.Exceeding $500 the tax rate shall be Rs. 10,400.