Islamabad, March 2, 2025 – The Federal Board of Revenue (FBR) has successfully generated Rs 11 billion in withholding tax from exporters under new tax regulations implemented for the current fiscal year.
According to sources within the FBR, the Large Taxpayers Office (LTO) Karachi, a key revenue-collecting body of the FBR, collected this amount during the first seven months (July – January) of the ongoing financial year. The withholding tax was imposed on exporters under Section 147(6C), a provision introduced through the Finance Act, 2024.
The FBR officials explained that the Finance Act 2024 introduced a new non-obstante clause in Section 147, specifically sub-section (6C). Under this amendment, withholding agents designated under sub-sections (1), (3), (3B), and (3C) of Section 154 are required to deduct or collect tax at the time of foreign exchange realization, sale of goods, export transactions, payments to indirect exporters, or clearance of goods.
Under these provisions, withholding agents now deduct 2% on export proceeds—comprising 1% minimum tax under Section 154 and an additional 1% adjustable advance tax under Section 147(6C). This change has significantly increased the tax liability of exporters, leading to increased revenue generation for the FBR.
The FBR officials further noted that these measures were introduced to enhance tax compliance and ensure that exporters contribute a fair share to the national exchequer. While some exporters have expressed concerns regarding the additional tax burden, the FBR maintains that the move is necessary for broadening the tax base and improving revenue collection efficiency.
Industry experts have pointed out that while the new tax regime increases compliance costs for exporters, it also helps in reducing tax evasion and improving documentation within the export sector. The FBR has assured stakeholders that it will continue to monitor the impact of these tax changes and make necessary adjustments to facilitate businesses while ensuring transparency and fair taxation.
With exporters now required to comply with the revised tax regulations, the FBR anticipates continued revenue growth from the sector in the coming months, reinforcing its efforts to strengthen the country’s tax system.