Karachi, September 6, 2024 – The Federal Board of Revenue (FBR) has announced updated income tax rates on payments made for goods and services under Section 153 of the Income Tax Ordinance, 2001.
These rates, which have been issued for the tax year 2024-25, differentiate between individuals and entities listed on the Active Taxpayers List (ATL) and those who are not.
The withholding tax card recently released by the FBR outlines specific rates based on the nature of the goods or services provided, with significantly higher taxes imposed on non-ATL individuals and companies.
Key Rates on Sales of Goods:
• For the sale of rice, cotton seed, or edible oils, the tax rate is 1.5% for ATL entities and 3% for non-ATL.
• On the sale of goods via toll manufacturing (companies), the rate is 9% for ATL and 18% for non-ATL.
• For the sale of goods (other than toll manufacturing for companies), ATL members face a 5% tax rate, while non-ATL pay 10%.
• In the case of toll manufacturing for non-company entities, the rate jumps to 11% for ATL and 22% for non-ATL.
• For the sale of goods not involving toll manufacturing for non-company entities, ATL taxpayers pay 5.5%, whereas non-ATL taxpayers face 11%.
Key Rates on Services:
• For certain services, the rate is 4% for ATL and 8% for non-ATL.
• For services other than those specifically listed, companies face a 9% rate for ATL and 18% for non-ATL. Non-company entities pay 11% if on the ATL and 22% if off it.
• Payments made to electronic and print media for advertising services are taxed at 1.5% for ATL and 3% for non-ATL.
Sportspersons are subject to a 10% tax rate if listed on the ATL, which rises to 20% for those who are not.
For companies, the tax on other types of payments is 7.5% for ATL members and 15% for non-ATL, while other cases face 8% for ATL and 16% for non-ATL.
Under Section 153(2), the tax rate for ATL taxpayers is set at 1%, while non-ATL individuals and entities must pay 2%.
These new tax rates aim to encourage compliance with tax regulations, especially by incentivizing taxpayers to remain on the ATL, ensuring they benefit from lower tax obligations.
