The Federal Board of Revenue (FBR) has released the latest rates of withholding income tax applicable to the import of goods for the tax year 2022-2023.
The updated withholding tax rates, effective from July 1, 2022, have been incorporated into the Income Tax Ordinance, 2001, following amendments introduced through the Finance Act, 2022.
The withholding tax rates apply under Section 148 of the Income Tax Ordinance, 2001, and they have been specified for both individuals listed on the Active Taxpayers List (ATL) and those not on the ATL.
The following are the rates of withholding tax applicable to the import of goods:
1. Goods Falling in Part-I, 12th Schedule
• Rates on ATL: 1%
• Rates on Non-ATL: 2%
2. Goods Falling in Part-II, 12th Schedule
• Rates on ATL: 2%
• Rates on Non-ATL: 4%
3. Goods Falling in Part-II, 12th Schedule – Commercial Importer
• Rates on ATL: 3.5%
• Rates on Non-ATL: 7%
4. Goods Falling in Part-III, 12th Schedule
• Rates on ATL: 5.5%
• Rates on Non-ATL: 11%
5. Proviso 1(a) – Manufacturers Falling in SRO 1125(1)/2011 of 31.12.11
• Rates on ATL: 1%
• Rates on Non-ATL: 2%
6. Proviso 1(b) – Pharma Products
• Rates on ATL: 4%
• Rates on Non-ATL: 8%
7. Proviso 1(c) – CKD Kits for EVs
• Rates on ATL: 1%
• Rates on Non-ATL: 2%
8. Proviso 2 Rates for Mobile Phones (PCT 8517.1219)
• ATL: Rs.70 to Rs.11,500
• Non-ATL: Rs.140 to Rs.23,000
9. Proviso 2 Rates for Mobile Phones (PCT 8517.1211)
• ATL: Rs.0 to Rs.5,200
• Non-ATL: Rs.0 to Rs.10,400
It is essential for importers and other stakeholders to be aware of these revised withholding tax rates to ensure compliance with tax regulations. The rates vary based on the nature of imported goods and the taxpayer’s status on the ATL. The FBR aims to streamline the taxation process and enhance transparency in line with its ongoing efforts to improve the tax system in Pakistan.
For detailed information, interested parties are encouraged to refer to Part I, Part II, and Part III of the 12th Schedule of the Income Tax Ordinance, 2001, as provided by the FBR. Keeping abreast of these withholding tax rates will facilitate smooth import processes and contribute to a more transparent and efficient taxation framework in the country.
