The Federal Board of Revenue (FBR) has defined the super tax rate for the tax year 2022 under the First Schedule of the Income Tax Ordinance, 2001.
This move is in accordance with the amendments incorporated through the Finance Act, 2021, and the Income Tax Ordinance, 2001, updated up to June 30, 2021.
The super tax rates for tax year 2022 are outlined as follows:
1. For Banking Companies: The super tax rate for banking companies during the tax year 2022 and onwards is set at 4%. This rate applies specifically to banking entities operating within Pakistan.
2. For Other Than Banking Companies: Non-banking companies, falling outside the category of banking companies, are exempt from super tax during the tax year 2022 and onwards. The super tax rate for these entities is defined as zero percent.
The FBR’s approach to super tax differentiates between banking and non-banking companies, acknowledging the distinctive nature of their operations and financial structures. While banking companies are subject to a 4% super tax rate, other entities are relieved from this additional tax burden for the tax year 2022 and onwards.
It is important to note that for banking companies, the super tax for the tax year 2019 shall be payable on an estimated basis by the thirtieth day of June, 2018. This provision ensures that historical financial data is considered in the calculation of super tax for banking companies, aligning with the broader principles of taxation fairness.
The super tax, introduced as a temporary measure to generate additional revenue during certain economic conditions, is periodically assessed and adjusted based on the prevailing economic circumstances. The differentiation in rates between banking and non-banking companies reflects the government’s strategy to balance revenue generation with the promotion of a conducive business environment.
By providing clarity on the super tax rates for tax year 2022, the FBR aims to facilitate compliance and ensure that businesses can plan their financial strategies accordingly. The exemptions for non-banking companies contribute to a more predictable tax environment, fostering economic growth and stability.
Taxpayers, especially those within the banking sector, are advised to stay informed about these super tax rates and comply with their obligations to avoid any legal repercussions. The FBR’s commitment to transparency and consistency in tax regulations is evident in its efforts to clearly define and communicate tax rates, contributing to a fair and predictable tax system in Pakistan.
