The Finance Bill 2023 has proposed a significant provision that mandates employers or agencies of foreign workers to pay advance tax. This development aims to streamline taxation processes and ensure compliance with the Income Tax Ordinance, 2001.
The newly introduced Section 231C focuses specifically on foreign domestic workers, bringing them within the ambit of advance tax regulations.
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Under this provision, any authority responsible for issuing or renewing a domestic aide visa to a foreign national employed as a domestic worker will be required to collect advance tax from the agency, sponsor, or employer. The tax amount to be collected is set at two hundred thousand rupees.
Furthermore, the tax collected or collectible under this section will be considered as adjustable advance tax for the relevant tax year. It will be applicable to the income earned by the agency, sponsor, or individual employing the services of the aforementioned foreign national.
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The introduction of this provision seeks to enhance tax compliance and generate additional revenue for the government. By imposing advance tax on employers or agencies of foreign workers, the authorities aim to ensure that these individuals and entities fulfill their tax obligations promptly.
Additionally, this provision aligns with the government’s broader efforts to create a fair and transparent taxation system. By expanding the scope of advance tax to include foreign domestic workers, the authorities aim to establish a level playing field and maintain equity among taxpayers.
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The Finance Bill 2023 has introduced a new provision, Section 231C, which requires employers or agencies of foreign workers, particularly foreign domestic workers, to pay advance tax. This measure will facilitate effective tax collection and bolster compliance with the Income Tax Ordinance, 2001. The advance tax collected will contribute to the government’s revenue while ensuring a more equitable taxation system for all stakeholders involved.
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