Karachi, September 4, 2024 – The Federal Board of Revenue (FBR) has announced the import tax rates applicable during the tax year 2024-25, distinguishing between those listed in the Active Taxpayers List (ATL) and those not on the list.
This move by the FBR aims to encourage tax compliance by offering favorable tax rates to those who are registered on the ATL, while imposing higher rates on non-ATL individuals and entities.
According to the recently issued withholding tax card for tax year 2024-25, the FBR has specified different tax rates based on the category of goods being imported and the taxpayer’s status on the ATL. The tax rates are categorized under various parts of the 12th Schedule of the Income Tax Ordinance, 2001, reflecting the complexity and diversity of imported goods.
For goods falling under Part-I of the 12th Schedule, the tax rate for ATL importers is set at 1%, while non-ATL importers will be subject to a 2% tax rate. This category generally includes essential goods that are critical for economic activities, making the tax rates relatively low.
For goods under Part-II of the 12th Schedule, the tax rate is doubled. ATL importers will face a 2% tax, while non-ATL importers will be taxed at 4%. When these goods are imported by commercial importers, the rates increase further, with ATL importers paying 3.5% and non-ATL importers facing a 7% tax. This category often includes items that have a higher economic impact, hence the higher tax rates.
Part-III of the 12th Schedule covers goods that are generally considered luxury or non-essential items. Here, ATL importers are subject to a 5.5% tax rate, while non-ATL importers will pay a hefty 11% tax. For commercial importers bringing in these goods, the rates are slightly higher at 6% for ATL and 12% for non-ATL.
Manufacturers importing goods specified in SRO 1125 (I)/2011, dated December 31, 2011, will benefit from a 1% tax rate if they are on the ATL, whereas non-ATL manufacturers will pay a 2% tax. This provision is designed to support the manufacturing sector by providing lower tax rates to those who are compliant with tax regulations.
Pharmaceutical products, which are essential for public health, are subject to a 4% tax rate for ATL importers and 8% for non-ATL importers. This distinction underscores the government’s intent to ensure affordable access to medicines while promoting tax compliance.
The import of Completely Knocked Down (CKD) Kits for Electric Vehicles (EVs) is taxed at 1% for ATL and 2% for non-ATL, reflecting the government’s push towards promoting environmentally friendly transportation solutions.
For mobile phones, the tax rates vary significantly depending on the model and its classification under the Pakistan Customs Tariff (PCT) codes. Under PCT 8517.1219, the tax ranges from Rs 70 to Rs 11,500 for ATL and Rs 140 to Rs 23,000 for non-ATL. For PCT 8517.1211, the rates range from Rs 0 to Rs 5,200 for ATL and Rs 0 to Rs 10,400 for non-ATL.
The FBR’s differentiated tax rates serve as both an incentive for tax compliance and a measure to penalize those who remain outside the formal tax net. By imposing higher rates on non-ATL importers, the FBR aims to broaden the tax base and increase revenue, while providing relief to compliant taxpayers.
