Tag: Finance Bill 2022

Advance tax on immovable property purchase enhanced to 250% for non-filers

ISLAMABAD: Pakistan has announced a sharp increase in advance tax on purchase of immovable property to 250 per cent for persons not filing income tax returns.

The country presented budget 2022/2023 on June 10, 2022 and announced various taxation measures to boost revenue collection.

The Finance Bill, 2022 proposed the sharp increase in advance tax for persons not filing tax returns. The decision has been taken to further burden the persons not complying with the statutory requirements.

READ MORE: Pakistan massively increases taxation on motor vehicles

The bill proposed amendment in Section 236K of Income Tax Ordinance, 2001. According to the proposed amendment:

“Provided further that the tax required to be collected under section 236K shall be increased by two hundred and fifty percent of the rate specified in Division XVIII of Part IV of the First Schedule in case of persons not appearing in the active taxpayers.”

At present the buyer, in case of filer of income tax return, of immovable property is required to pay advance tax at 1 per cent of the value. However, in case of non-filer the rate shall be enhanced by 100 per cent or 2 per cent as envisaged under Tenth Schedule of the Income Tax Ordinance, 2001.

READ MORE: New rates of capital gain tax on disposal of securities

According to the Ordinance updated up to June 30, 2021, following is the text of Section 236K:

236K. Advance tax on purchase or transfer of immovable property.—(1) Any person responsible for registering, recording or attesting transfer of any immovable property shall at the time of registering, recording or attesting the transfer shall collect from the purchaser or transferee advance tax at the rate specified in Division XVIII of Part IV of the First Schedule.

Explanation,—For removal of doubt, it is clarified that the person responsible for registering, recording or attesting transfer includes person responsible for registering, recording or attesting transfer for local authority, housing authority, housing society, co-operative society, public and private real estate projects registered/governed under any law, joint ventures, private commercial concerns and registrar of properties.

(2) The advance tax collected under sub-section (1) shall be adjustable:

READ MORE: Pakistan slaps 45% corporate tax on banks

Provided that if the buyer or transferee is a non-resident individual holding a Pakistan Origin Card (POC) or National ID Card for Overseas Pakistanis (NICOP) or Computerized National ID Card (CNIC) who has acquired the said immovable property through a Foreign Currency Value Account (FCVA) or NRP Rupee Value Account (NRVA) maintained with authorized banks in Pakistan under the foreign exchange regulations issued by the State Bank of Pakistan, the tax collected under this section from such persons shall be final discharge of tax liability for such buyer or transferee.

(3) Any person responsible for collecting payments in installments for purchase or allotment of any immovable property where the transfer is to be effected after making payment of all installments, shall at the time of collecting installments collect from the allotee or transferee advance tax at the rate specified in Division XVIII of Part IV of the First Schedule:

READ MORE: Tax rates for business individuals, AOPs during TY2023

Provided that where tax has been collected along with installments, no further tax under this section shall be collected at the time of transfer of property in the name of buyer from whom tax has been collected in installments which is equal to the amount payable in this section.

(4) Nothing contained in this section shall apply to a scheme introduced by the Federal Government, or Provincial Government or an Authority established under a Federal or Provincial law for expatriate Pakistanis:

“Provided that the mode of payment by the expatriate Pakistanis in the said scheme or schemes shall be in the foreign exchange remitted from outside Pakistan through normal banking channels.”

READ MORE: Pakistan reintroduces advance tax on foreign payments

June 13, 2022

Pakistan massively increases taxation on motor vehicles

ISLAMABAD: Pakistan has massively increased the amount of tax on purchase of motor vehicles from July 01, 2022.

The country presented its federal budget 2022/2023 on June 10, 2022 and took various taxation measures to boost revenue collection.

Finance Minister Miftah Ismail while presenting the budget stated that in continuation of our policy to shift the burden of tax on the rich class, advance tax on motor vehicles exceeding 1600cc is proposed to be increased.

Furthermore, advance tax shall also be collected at the rate of 2 per cent of the value in cases of high value hybrid and electric vehicles. Additionally, the rate of tax for non-filers shall be enhanced to 200 per cent from the current 100 per cent.

Accordingly, the Finance Bill, 2022 proposed the following new rates of advance tax on registration of motor vehicles from July 01, 2022:

S.No	Engine Capacity	Tax
(1)	(2)	(3)
1.	Upto 850 cc	Rs.10,000
2.	851cc to 1000cc	Rs.20,000
3.	1001cc to 1300cc	Rs.25,000
4.	1301cc to 1600cc	Rs.50,000
5.	1601cc to 1800cc	Rs.150,000
6.	1801cc to 2000cc	Rs.200,000
7.	2001cc to 2500cc	Rs.300,000
8.	2501cc to 3000cc	Rs.400,000
9.	Above 3000cc	Rs.500,000

According to the Finance Bill, 2022, provided that in cases where engine capacity is not applicable and the value of vehicle is Rupees five million or more, the rate of tax collectible shall be 3% of the import value as increased by customs duty, sales tax and federal excise duty in case of imported vehicles or invoice value in case of locally manufactured or assembled vehicles.”

It further said: “Provided that the tax required to be collected under section 231B shall be increased by two hundred percent of the rate specified in First Schedule in case of persons not appearing in the active taxpayers’ list.”

The existing rates of advance tax on motor vehicles are (for filers and it will increase by 100 per cent in case of non-filer of income tax returns):

1. upto 850cc: Rs. 7,500

2. 851cc to 1000cc: Rs. 15,000

3. 1001cc to 1300cc: Rs. 25,000

4. 1301cc to 1600cc: Rs. 50,000

5. 1601cc to 1800cc: Rs. 75,000

6. 1801cc to 2000cc: Rs. 100,000

7. 2001cc to 2500cc: Rs. 150,000

8. 2501cc to 3000cc: Rs. 200,000

9. Above 3000cc: Rs. 250,000]

June 13, 2022

New rates of capital gain tax on disposal of securities

ISLAMABAD: The government has proposed new rates of capital gain tax on disposal of securities traded at Pakistan Stock Exchange (PSX).

Pakistan presented its federal budget on June 10, 2022 and introduced various taxation measures to boost revenue collection.

Through Finance Bill, 2022 proposed to revise the rates of capital gain tax for tax year 2023 and onwards.

Following is the proposed rates of capital gain tax:

S.No	Holding Period	Rate of Tax for Tax year 2023 and onwards
(1)	(2)	(3)
1.	Where the holding period does not exceed one year	15%
2.	Where the holding period exceeds one year but does not exceed two years	12.5%
3.	Where the holding period exceeds two years but does not exceed three years	10%
4.	Where the holding period exceeds three years but does not exceed four years	7.5%
5.	Where the holding period exceeds four years but does not exceed five years	5%
6.	Where the holding period exceeds five years but does not exceed six years	2.5%
7.	Where the holding period exceeds six years	0%
8.	Future commodity contracts entered into by members of Pakistan Mercantile Exchange	5%”;

The Federal Board of Revenue (FBR) collects capital gain tax on disposal of securities under Section 37A of the Income Tax Ordinance, 2001.

Following is the text of Section 37A of Income Tax Ordinance, 2001:

37A. Capital gain on disposal of securities.—(1) The capital gain arising on or after the first day of July 2010, from disposal of securities, other than a gain that is exempt from tax under this Ordinance, shall be chargeable to tax at the rates specified in Division VII of Part I of the First Schedule:

Provided that this section shall not apply to a banking company and an insurance company.

(1A) The gain arising on the disposal of a security by a person shall be computed in accordance with the following formula, namely: —

A – B

Where —

(i) ‘A’ is the consideration received by the person on disposal of the security; and

(ii) ‘B’ is the cost of acquisition of the security.

(2) The holding period of a security, for the purposes of this section, shall be reckoned from the date of acquisition (whether before, on or after the thirtieth day of June, 2010) to the date of disposal of such security falling after the thirtieth day of June, 2010.

(3) For the purposes of this section “security” means share of a public company, voucher of Pakistan Telecommunication Corporation, Modaraba Certificate, an instrument of redeemable capital,debt Securities, unit of exchange traded fund and derivative products.

(3A) For the purpose of this section, “debt securities” means –

(a) Corporate Debt Securities such as Term Finance Certificates (TFCs), Sukuk Certificates (Sharia Compliant Bonds), Registered Bonds, Commercial Papers, Participation Term Certificates (PTCs) and all kinds of debt instruments issued by any Pakistani or foreign company or corporation registered in Pakistan; and

(b) Government Debt Securities such as Treasury Bills (T-bills), Federal Investment Bonds (FIBs), Pakistan Investment Bonds (PIBs), Foreign Currency Bonds, Government Papers, Municipal Bonds, Infrastructure Bonds and all kinds of debt instruments issued by Federal Government, Provincial Governments, Local Authorities and other statutory bodies.

“Explanation: For removal of doubt it is clarified that derivative products include future commodity contracts entered into by the members of Pakistan Mercantile Exchange whether or not settled by physical delivery.”

(3B) For the purpose of this section, “shares of a public company” shall be considered as security if such company is a public company at the time of disposal of such shares.

(4) Gain under this section shall be treated as a separate block of income.

(5) Notwithstanding anything contained in this Ordinance, where a person sustains a loss on disposal of securities in a tax year, the loss shall be set off only against the gain of the person from any other securities chargeable to tax under this section and no loss shall be carried forward to the subsequent tax year:

Provided that so much of the loss sustained on disposal of securities in tax year 20l9 and onwards that has not been set off against the gain of the person from disposal of securities chargeable to tax under this section shall be carried forward to the following tax year and set off only against the gain of the person from disposal of securities chargeable to tax under this section, but no such loss shall be carried forward to more than three tax years immediately succeeding the tax year for which the loss was first computed.

(6) To carry out purpose of this section, the Board may prescribe rules.

The rate of tax to be paid under section 37A shall be as follows:—

June 12, 2022

Pakistan slaps 45% corporate tax on banks

ISLAMABAD: Pakistan has slapped corporate income tax at 45 per cent on banks, which is raised from 35 per cent.

The country presented its federal budget on June 10, 2022 and introduced tax measures for boosting revenue collection.

READ MORE: Tax rates for business individuals, AOPs during TY2023

Through Finance Bill, 2022 the tax rate for banking companies have been proposed to increase to 45 per cent from existing 35 per cent.

In this regard, the bill proposed amendment to Division II, Part I of First Schedule of the Income Tax Ordinance, 2001.

Proposed Rates of Tax for Companies

READ MORE: Pakistan reintroduces advance tax on foreign payments

The rate of tax imposed on the taxable income of a company shall be as set out in the following Table, namely:-

Type of Company Rate of Tax
Small company 20%
Banking company 45%
Any other company 29%

Following are the existing rates of tax for corporate entities for tax year 2022:

(i) The rate of tax imposed on the taxable income of a company for the tax year 2007 and onward shall be 35%:

Provided that the rate of tax imposed on the taxable income of a company other than a banking company, shall be 34% for the tax year 20145:

READ MORE: Exchange companies to withhold tax on payment to MTOs

Provided further that the rate of tax imposed on the taxable income of a company, other than a banking company, shall be 33% for the tax year 2015:

“Provided further that the rate of tax imposed on taxable income of a company, other than banking company shall be 32% for the tax year 2016, 31% for tax year 2017, 30% for tax year 2018 and 29% for tax year 2019 and onwards.

READ MORE: Salaried persons denied adjustments against deduction

(iii) where the taxpayer is a small company as defined in section 2, tax shall be payable at the rate of 25%:

Provided that for tax year 2019 and onwards tax rates shall be as set out in the following Table, namely:—

Tax year Rate of Tax
2019 24%
2020 23%
2021 22%
2022 21%
2023 and onwards 20%”

June 12, 2022

Tax rates for business individuals, AOPs during TY2023

ISLAMABAD: Finance Bill, 2022 has proposed to revise tax rates for business individuals and Association of Persons (AOPs) during Tax year 2023.

The government presented its federal budget 2022/2023 and introduced various changes to taxation laws to ensure documentation and plug revenue leakages.

Through Finance Bill, 2022 the basic exemption of tax on income of individuals and AOPs has been increased to Rs600,000 from Rs400,000.

Following is the proposed tax card for business individuals and AOPs.

Sr. No.	Taxable Income	Rate of Tax
1.	Where taxable income does not exceed Rs. 600,000/	0 per cent
2.	Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 800,000	5 per cent of the amount exceeding Rs. 600,000
3.	Where taxable income exceeds Rs. 800,000 but does not exceed Rs. 1,200,000	Rs. 10,000 + 12.5 per cent of the amount exceeding Rs. 800,000
4.	Where taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 2,400,000	Rs.60,000 + 17.5 per cent of the amount exceeding Rs. 1,200,000
5.	Where taxable income exceeds Rs. 2,400,000 but does not exceed Rs. 3,000,000	Rs. 270,000 + 22.5 per cent of the amount exceeding Rs. 2,400,000
6.	Where taxable income exceeds Rs. 3,000,000 but does not exceed Rs. 4,000,000	Rs. 405,000 + 27.5 per cent of the amount exceeding Rs. 3,000,000
7.	Where taxable income exceeds Rs. 4,000,000 but does not exceed Rs. 6,000,000	Rs. 680,000 + 32.5 per cent of the amount exceeding Rs. 4,000,000
8.	Where taxable income exceeds Rs. 6,000,000	Rs. 1,330,000 + 35 per cent of the amount exceeding Rs. 6,000,000.”

Following are the existing rates of tax for Individuals and Association of Persons for tax year 2022:

(1) Subject to clause (2), the rates of tax imposed on the income of every individual and association of persons except a salaried individual shall be as set out in the following Table, namely:—

1. Where taxable income does not exceed Rs. 400,000: the tax rate shall be zero per cent.

2. Where the taxable income exceeds Rs. 400,000 but does not exceed Rs. 600,000: the tax rate shall be 5 per cent of the amount exceeding Rs. 400,000.

3. Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000: the tax rate shall be Rs. 10,000 plus 10 per cent of the amount exceeding Rs. 600,000.

4. Where taxable income exceeds Rs.1,200,000 but does not exceed Rs. 2,400,000: the tax rate shall be Rs. 70,000 plus 15 per cent of the amount exceeding Rs. 1,200,000.

5. Where taxable income exceeds Rs. 2,400,000 but does not exceed Rs. 3,000,000: the tax rate shall be Rs. 250,000 plus 20 per cent of the amount exceeding Rs. 2,400,000.

6. Where taxable income exceeds Rs. 3,000,000 but does not exceed Rs. 4,000,000: the tax rate shall be Rs. 370,000 plus 25 per cent of the amount exceeding Rs. 3,000,000.

7. Where taxable income exceeds Rs. 4,000,000 but does not exceed Rs. 6,000,000: the tax rate shall be Rs. 620,000 plus 30 per cent of the amount exceeding Rs. 4,000,000.

8. Where taxable income exceeds Rs. 6,000,000: the tax rate shall be Rs. 1,220,000 plus 35 per cent of the amount exceeding Rs. 6,000,000.

June 12, 2022

Exchange companies to withhold tax on payment to MTOs

ISLAMABAD: Exchange companies have been brought under the ambit of withholding tax and now they are required to deduct tax on payment to international money transfer operators (MTOs).

The change has been proposed through budget 2022/2023, which was presented on June 10, 2022.

Through Finance Bill, 2022 amendments suggested to Section 152 of the Income Tax Ordinance, 2001.

READ MORE: Salaried persons denied adjustments against deduction

According to amendments, new sub-sections have been proposed:

“(1DC) Every exchange company licensed by the State Bank of Pakistan shall deduct tax at the time of making payment of service charges or commission or fee, by whatever name called, to the global money transfer operators, international money transfer operators or such other persons engaged in international money transfers or cross-border remittances for facilitating outward remittances, at the rates given in Division IV, Part I of the First Schedule:

READ MORE: New ADR mechanism introduced to facilitate taxpayers

Provided that where such person retains service charges or commission or fee, by whatever name called from the amount payable to the exchange company on any account, the exchange company shall be deemed to have paid the service charges or commission or fee, by whatever name called and the exchange company shall collect the tax accordingly.

(1DD) Every banking company while making payment to card network company or payment gateway or any other person, of any transaction fee or licensing fee or service charges or commission or fee by whatever name called or interbank financial telecommunication services, shall deduct tax at the rates given in Division IV, Part I of the First Schedule:

READ MORE: FBR to disable mobile SIMs on non-filing of tax returns

Provided that where card network company or payment gateway or any other person retains money in relation to aforementioned services from the amount payable to the banking company on any account, the banking company shall be deemed to have paid the amount and the banking company shall collect the tax accordingly.”;

According to Income Tax Ordinance, 2001 updated up to June 30, 2021, the rate of tax imposed under section 6 on payments to non-residents shall be 15 per cent of the gross amount of the royalty or fee for technical services and 5 per cent of the gross amount of the fee for offshore digital services.

READ MORE: Pakistan amends tax laws to legalize money transfers

June 12, 2022
Salaried persons denied adjustments against deduction

ISLAMABAD: Salaried persons have been denied adjustment of tax credits against the deduction at source. The amendment has been introduced through Finance Bill, 2022.

The government on June 10, 2022 presented federal budget 2022/2023 and announced various taxation measures.

The Finance Bill, 2022 proposed amendment to sub-section 1 of Section 149 of Income Tax Ordinance, 2001.

READ MORE: New ADR mechanism introduced to facilitate taxpayers

Under the present laws, employers are required to deduct / withholding tax at the time of payment to their employees. The employers are also authorized to adjust withholding tax paid by employees against other source of income.

However, through the proposed amendment employers would not be allowed to adjust deduction under Section 62, 63 and 64.

Finance Bill also recommended changes in Alternate Dispute Resolution (ADR).

Through the Finance Bill, 2022 amendment to Section 134A of Income Tax Ordinance, 2001 has been suggested.

READ MORE: FBR to disable mobile SIMs on non-filing of tax returns

The text of proposed amended Section 134A is as follow:

“134A. Alternative Dispute Resolution. — (1) Notwithstanding any other provision of the Ordinance, or the rules made thereunder, an aggrieved person in connection with any dispute pertaining to—

READ MORE: Pakistan amends tax laws to legalize money transfers

(a) the liability of tax of one hundred million and above against the aggrieved person or admissibility of refund, as the case may be;

(b) the extent of waiver of default surcharge and penalty; or

(c) any other specific relief required to resolve the dispute; may apply to the Board for the appointment of a committee for the resolution of any hardship or dispute mentioned in detail in the application, which is under litigation in any court of law or an Appellate Authority, except where criminal proceedings have been initiated.

READ MORE: Fixed tax rates for retailers, payable through electricity bills

June 12, 2022
Pakistan restores final tax regime for importers

ISLAMABAD: The present coalition government has accepted demand of business community and in the budget 2022/2023 brought importers back into final tax regime.

Through Finance Bill, 2022 important amendment has been suggested to Section 148 of the Income Tax Ordinance, 2001.

READ MORE: New ADR mechanism introduced to facilitate taxpayers

Previously, PTI government after consultation with manufacturers and other stakeholders brought the importers into minimum tax regime through Finance Act, 2019.

The importers were brought into the minimum tax regime after arguments that the importers were misusing the tax incentives as the final tax regime was not subject to audit and returns. The importers are required to file a statement only under the FTR.

READ MORE: FBR to disable mobile SIMs on non-filing of tax returns

The Finance Bill, 2022 proposed to make amendment in sub-section 7 of Section 148 of the Income Tax Ordinance, 2001 to substitute the word ‘minimum’ with the word ‘final’.

A new section 7A to Income Tax Ordinance has also been proposed, which is:

“(7A) Notwithstanding anything contained in sub-section (7), the tax required to be collected under this section shall be minimum tax on the income every person arising from imports of following goods –

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(i) edible oil;

(ii) packaging material;

(iii) paper and paper board; or

(iv) plastics:

Provided that the Board with the approval of Minister in-charge may, by a notification in the official Gazette, add any entry thereto or omit any entry therefrom or amend any entry therein this sub-section.”

READ MORE: Fixed tax rates for retailers, payable through electricity bills

June 12, 2022
New ADR mechanism introduced to facilitate taxpayers

ISLAMABAD: A new mechanism of Alternate Dispute Resolution (ADR) has been introduced through Finance Bill, 2022 to facilitate taxpayers.

The government on June 10, 2022 presented the federal budget 2022/2023. Through the budget various taxation measures and facilitation steps have been taken.

Through the Finance Bill, 2022 amendment to Section 134A of Income Tax Ordinance, 2001 has been suggested.

The text of proposed amended Section 134A is as follow:

READ MORE: FBR to disable mobile SIMs on non-filing of tax returns

“134A. Alternative Dispute Resolution. — (1) Notwithstanding any other provision of the Ordinance, or the rules made thereunder, an aggrieved person in connection with any dispute pertaining to—

(a) the liability of tax of one hundred million and above against the aggrieved person or admissibility of refund, as the case may be;

(b) the extent of waiver of default surcharge and penalty; or

(c) any other specific relief required to resolve the dispute; may apply to the Board for the appointment of a committee for the resolution of any hardship or dispute mentioned in detail in the application, which is under litigation in any court of law or an Appellate Authority, except where criminal proceedings have been initiated.

READ MORE: Pakistan amends tax laws to legalize money transfers

(2) The application for dispute resolution shall be accompanied by an initial proposition for resolution of the dispute, including an offer of tax payment, from which, the applicant would not be entitled to retract.

(3) The Board may, after examination of the application of an aggrieved person, appoint a committee, within forty five days of receipt of such application in the Board, comprising,—

(i) Chief Commissioner Inland Revenue having jurisdiction over the case;

(ii) person to be nominated by the taxpayer from a panel notified by the Board comprising –

(a) chartered accountants, cost and management accountants and advocates having a minimum of ten years’ experience in the field of taxation;

READ MORE: Fixed tax rates for retailers, payable through electricity bills

(b) officers of the Inland Revenue Service who have retired in BS 21 or above; or

(c) reputable businessmen as nominated by Chambers of Commerce and Industry:

Provided that the taxpayer shall not nominate a Chartered Accountant or an advocate if the said Chartered Accountant or the advocate is or has been an auditor or an authorized representative of the taxpayer; and

(d) person to be nominated through consensus by the members appointed under (i) and (ii) above, from the panel as notified by the Board in (ii) above:

Provided that where the member under this clause cannot be appointed through consensus, the

Board may nominate a member proposed by the taxpayer eligible to be nominated as per clause (ii).

(4) The aggrieved person, or the Commissioner, or both, as the case may be, shall withdraw the appeal pending before any court of law or an Appellate Authority, after constitution of the committee by the Board under sub-section (3), in respect of dispute as mentioned in sub-section (1).

(5) The committee shall not commence the proceedings under sub-section (6) unless the order of withdrawal by the court of law or the Appellate Authority is communicated to the Board:

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Provided that if the order of withdrawal is not communicated within seventy five days of the appointment of the committee, the said committee shall be dissolved and provisions of this section shall not apply.

(6) The Committee appointed under sub-section (3) shall examine the issue and may, if it deems necessary, conduct inquiry, seek expert opinion, direct any officer of the Inland Revenue or any other person to conduct an audit and shall decide the dispute by majority, within one hundred and twenty days of its appointment:

Provided that in computing the aforesaid period of one hundred and twenty days, the period, if any, for communicating the order of withdrawal under sub-section (5) shall be excluded.

(7) The decision by the Committee under sub-section (6) shall not be cited or taken as a precedent in any other case or in the same case for a different tax year.

(8) The recovery of tax payable by a taxpayer in connection with any dispute for which a Committee has been appointed under sub-section (3) shall be deemed to have been stayed on withdrawal of appeal up to the date of decision by the Committee or the dissolution of the Committee whichever is earlier.

(9) The decision of the committee under sub-section (6) shall be binding on the Commissioner and the aggrieved person.

(10) If the Committee fails to decide within the period of one hundred and twenty days under sub-section (6), the Board shall dissolve the committee by an order in writing and the matter shall be decided by the court of law or the Appellate Authority which issued the order of withdrawal under sub-section (5) and the appeal shall be treated to be pending before such court of law or the Appellate Authority as if the appeal had never been withdrawn.

READ MORE: CGT up to 15% slapped on immovable properties

(11) The Board shall communicate the order of dissolution to the court of law or the Appellate Authority and the Commissioner.

(12) The aggrieved person, on receipt of the order of dissolution, shall communicate it to the court of law or the Appellate Authority, which shall decide the appeal within six months of the communication of said order.

(13) The aggrieved person may make the payment of income tax and other taxes as decided by the committee under sub-section (6) and all decisions, orders and judgments made or passed shall stand modified to that extent.

(14) The Board may prescribe the amount to be paid as remuneration for the services of the members of the Committee, other than the member appointed under clause (i) of sub-section (3).

(15) The Board may, by notification in the official Gazette, make rules for carrying out the purposes of this section.”

June 12, 2022
FBR to disable mobile SIMs on non-filing of tax returns

ISLAMABAD: Finance Bill 2022 has proposed to empower Federal Board of Revenue (FBR) to disable mobile phone SIMs of non-filers of annual tax return.

Besides, it is also proposed to empower the FBR to disconnect connections of electricity and gas of non-filers.

READ MORE: Pakistan amends tax laws to legalize money transfers

The amendment has been proposed though Budget 2022/2023, which was presented on June 10, 2022.

The Finance Bill, 2022 proposed insertion of Section 114B to the Income Tax Ordinance, 2001.

Following is the text of proposed amendment:

“114B. Powers to enforce filing of returns.— (1) Notwithstanding anything contained in any other law for the time being in force, the Board shall have the powers to issue income tax general order in respect of persons who are not appearing on active taxpayers’ list but are liable to file return under the provisions of the Ordinance.

READ MORE: Fixed tax rates for retailers, payable through electricity bills

(2) The income tax general order issued under sub-section (1) may entail any or all of the following consequences for the persons mentioned therein, namely:–

(a) disabling of mobile phones or mobile phone SIMS;

(b) discontinuance of electricity connection; or

(c) discontinuance of gas connection.

(3) The Board or the Commissioner having jurisdiction over the person mentioned in the income tax general order may order restoration of mobile phones, mobile phone SIMs and connections of electricity and gas, in cases where he is satisfied that —

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(a) the return has been filed; or

(b) person was not liable to file return under the provisions of the Ordinance.

(4) No person shall be included in the general order under sub-section (1) unless following conditions have been met with, namely:–

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(a) notice under sub-section (4) of section 114 has been issued;

(b) date of compliance of the notice under sub-section (4) of section 114 has elapsed; and

(c) the person has not filed the return.

(5) The action under this section shall not preclude any other action provided under the provisions of the Ordinance.”

June 12, 2022

Type of Company	Rate of Tax
Small company	20%
Banking company	45%
Any other company	29%

Tax year	Rate of Tax
2019	24%
2020	23%
2021	22%
2022	21%
2023 and onwards	20%”