Highlights of Key Tax Amendments through Finance Bill 2024

Highlights of Key Tax Amendments through Finance Bill 2024

The Chartered Accountants at A. F. Ferguson & Co. have presented highlights of key tax amendments introduced through the Finance Bill, 2024.

The salient features of the amendments proposed in the Finance Bill with regard to various taxation laws are as under:


1. Exporters of goods are brought into the normal tax regime whereby the withholding tax collected is to be treated as minimum tax. Introduction of additional advance tax at the rate of 1% of export proceeds, which is adjustable.

2. The topline rate for non-salaried individuals and Association of Persons is enhanced from 35% to 45%. With no abolishment of Super tax, such persons having income exceeding Rs 500 million would be subject to effective tax rate of 55%.

3. Tax rates of salaried individuals are to be increased however maximum rate is still 35%.

4. Tax incidence for non-filers considerably enhanced for transactions relating to immovable properties besides adding a new category of taxpayers whose name are on Active Taxpayers List but they filed the returns after the due date or extended date.

5. Capital gains relating to immovable properties are also proposed to be taxed without regard to the holding period for acquisitions on July 1, 2024 and onwards.

6. The concept of holding period abolished for capital gains relating to securities acquired on or after July 1, 2024 with separate rates prescribed for filers and non-filers.

7. The facility of exemption certificate for withholding tax is proposed to be withdrawn and henceforth the Commissioner will only be able to issue a certificate for lower rate of tax in certain cases. The amendments would adversely impact taxpayers whose income is exempt from tax or subject to 100% tax credit.

8. Withholding tax requirement on purchase of unlisted shares applicable at the earlier of payment or registration of shares with Securities & Exchange Commission of Pakistan or State Bank of Pakistan, as the case may be.

9. 25% of sales promotion and advertising expense to be disallowed in case of royalty arrangement with an associated concern on account of certain intangibles.

10. Rate of tax on dividend and capital gains from mutual funds and REITs enhanced.

11. Provisions relating to advance tax collection from distributors, wholesalers, retailers extended to all business sectors.

12. Reinstatement of Commissioner’s power to reject advance tax estimate in the absence of filing of relevant information by the taxpayer.

13. Under the revamped appellate procedure, the date for pending appeals to be transferred by the Commissioner Appeals to the Appellate Tribunal extended from June 16 to September 16, 2024.

14. FBR empowered to declare a minimum value of certain imported goods for the purpose of computation of advance tax collection at import stage.

15. Banking Companies would not be allowed to claim any adjustment on account of application of IFRS 9.

16. Reduction in tax liability available to full time teachers and researchers withdrawn.

17. The period of exemption on income of residents of erstwhile Tribal Areas is proposed to be extended for another year upto June 30, 2025.


18. Various sales tax exemptions and zero-rating facilities withdrawn.

19. Sales tax on pharma sector enhanced from 1% to 18% except for substances registered as drugs.

20. Sales tax assessment procedure has been revamped whereby the concepts of best judgement assessment and investigative audits also introduced.

21. Sales tax on advances reintroduced.

22. The definition of ‘tax fraud’ enhanced.


23. FED at the rate of 5% sought to be levied on allotment / transfer of immovable properties. This measure needs to be examined in the light of Constitutional provisions.

24. Minimum retail price of cigarettes in certain categories revised without any corresponding amendments in rates of duty applicable thereon.