Karachi, October 4, 2023 –Pakistan has instituted a 20 percent advance tax on individuals organizing marriage functions. However, this rate is not uniform, as those listed in the Active Taxpayers List (ATL) by the Federal Board of Revenue (FBR) will be subjected to a comparatively lower rate of 10 percent.
An official from the FBR clarified that this latest provision was incorporated by inserting Section 236CB into the Income Tax Ordinance, 2001, under the Finance (Supplementary) Act, 2023. Interestingly, the same provision had been removed in the previous fiscal year through the Finance Act, 2022.
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According to sources close to the matter, every specified individual is obligated to collect the advance tax from the total amount of the bill in the case of a function held in venues such as marriage halls, marquees, hotels, restaurants, commercial lawns, clubs, community places, or any other location used for such events. However, this rule is subject to conditions or limitations as prescribed.
In scenarios where food, services, or any other facilities are provided by another entity, the designated individual must also collect advance tax on the payment for such provisions from the person arranging or hosting the function.
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The FBR provided detailed explanations for key terms, defining “function” as encompassing any wedding-related event, seminar, workshop, session, exhibition, concert, show, party, or any gathering held for such purposes. The term “prescribed person” includes the owner, lease-holder, operator, or manager of a marriage hall, marquee, hotel, restaurant, commercial lawn, club, community place, or any other venue utilized for such events.
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This move has sparked discussions within the community, with some expressing concerns about its potential impact on the cost of organizing events. Critics argue that such measures may discourage individuals from hosting events or force them to reconsider their choice of venue due to increased financial burdens.
The FBR, however, contends that these tax adjustments are essential for revenue generation and are part of broader fiscal policies aimed at ensuring a fair and equitable distribution of tax burdens among citizens.
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