ISLAMABAD: The Federal Board of Revenue (FBR) has said that export of services has been brought under final tax regime effect from July 01, 2021.
The FBR in an explanation to Finance Act, 2021 stated that in line with the policy of the government to attract legal flow of remittances into the country and to promote export of services in all sectors of economy, a special regime at par with export of goods regime has been introduced through insertion of section 154A of the Income Tax Ordinance, 2001.
The service providers would be subjected to 1 per cent withholding tax under Division IVA of Part III of First Schedule of the Ordinance on their export proceeds remitted in Pakistan through Banks and authorized dealers of foreign exchange. This would be final tax.
The Board has also been empowered to include or exclude certain services from operation of this section. Moreover, the Board may prescribe rules for the purposes of this section.