Section 236G requires manufacturers and commercial importers to collect advance tax when selling goods to distributors, dealers and wholesalers.

The Federal Board of Revenue (FBR) has imposed advance income tax on sales to distributors, dealers and wholesalers during tax year 2027 under Section 236G of the Income Tax Ordinance, 2001.

According to the Income Tax Ordinance updated up to June 30, 2026, the provision applies throughout tax year 2027, covering the period from July 1, 2026, to June 30, 2027.

Under Section 236G, every manufacturer or commercial importer is required to collect advance tax at the time of selling goods to distributors, dealers and wholesalers.

The tax must be collected from the buyers at the rates specified in Division XIV of Part IV of the First Schedule to the Income Tax Ordinance, 2001.

The provision places the responsibility for collecting advance tax on manufacturers and commercial importers making sales to these business categories.

Section 236G also clarifies the treatment of tax collected under this provision. The amount collected will be allowed as credit when calculating the income tax payable by the distributor, dealer or wholesaler on taxable income for the tax year in which the collection takes place.

This means businesses purchasing goods from manufacturers and commercial importers can claim the collected amount against their applicable income tax liability.

The provision forms part of the FBR’s advance tax collection framework for businesses involved in the distribution and wholesale supply chain during tax year 2027.