New tax card sets higher withholding rates for non-ATL importers, with separate rates for commercial imports, pharmaceuticals, EV kits and mobile phones.
ISLAMABAD: The Federal Board of Revenue (FBR) on Tuesday issued the withholding tax card for Tax Year 2027, prescribing different tax rates on imports based on the category of goods, importer status and relevant provisions of the Income Tax Ordinance, 2001.
Under the tax card, importers appearing on the Active Taxpayers List (ATL) will generally be subject to lower withholding tax rates than non-ATL importers. The rates vary significantly depending on the category and nature of imported goods.
For goods covered under Part-I of the Twelfth Schedule, the withholding tax rate has been set at 1% for ATL importers and 2% for non-ATL importers.
For goods falling under Part-II of the Twelfth Schedule, the applicable rate is 2% for ATL taxpayers and 4% for non-ATL taxpayers.
Commercial importers of Part-II goods will face higher rates of 3.5% for ATL taxpayers and 7% for non-ATL taxpayers.
Higher rates apply to Part-III goods
The tax burden rises further for goods covered under Part-III of the Twelfth Schedule.
For these imports, the withholding tax rate is 5.5% for ATL importers, compared with 11% for non-ATL importers.
Commercial importers of Part-III goods will be subject to rates of 6% for ATL taxpayers and 12% for non-ATL taxpayers.
The differential rates mean that non-ATL commercial importers of Part-III goods face a withholding tax rate twice that applicable to ATL commercial importers.
Special rates for selected sectors
The FBR tax card also provides specific withholding tax rates for certain products and sectors.
Manufacturers covered under SRO 1125(I)/2011 dated December 31, 2011 will face a rate of 1% for ATL importers and 2% for non-ATL importers.
For pharmaceutical products, the applicable withholding tax rates are 4% for ATL taxpayers and 8% for non-ATL taxpayers.
Imports of completely knocked-down (CKD) kits for electric vehicles (EVs) will attract withholding tax at 1% for ATL importers and 2% for non-ATL importers.
Separate withholding rates for mobile phones
The FBR has prescribed separate withholding tax rates for mobile phones based on their Pakistan Customs Tariff (PCT) classifications.
For mobile phones falling under PCT 8517.1219, the rates range from Rs70 to Rs11,500 for ATL taxpayers and from Rs140 to Rs23,000 for non-ATL taxpayers.
For mobile phones classified under PCT 8517.1211, the applicable rates range from nil to Rs5,200 for ATL taxpayers and from nil to Rs10,400 for non-ATL taxpayers.
The mobile phone rates are referenced to Part-II of the First Schedule, read with Rule 1 of the Tenth Schedule, as specified in the FBR’s withholding tax card.
Non-ATL importers face higher tax burden
The withholding tax card highlights a significant difference between the tax treatment of ATL and non-ATL importers.
In most categories, taxpayers who are not included on the Active Taxpayers List face withholding tax rates that are twice those applicable to ATL importers. The difference is particularly pronounced for commercial imports and higher-rate categories under the Twelfth Schedule.
The latest tax card therefore reinforces the financial incentive for importers to remain compliant with their tax filing obligations and maintain active taxpayer status.
The prescribed rates will apply during Tax Year 2027 in accordance with the relevant provisions of the Income Tax Ordinance, 2001 and the schedules and rules referenced in the FBR’s withholding tax framework.