The FBR (Federal Board of Revenue) has amended withholding tax on export of goods. Which applicable during the tax year 2021 (July 01, 2020, to June 30, 2021). Similarly, Income Tax Ordinance, 2001 (updated June 30, 2020) after amendments added through Finance Act, 2020. This article describes benefits being a filer in respect of withholding tax on export of goods. The FBR has ruled the Advance Tax On import & export, under section 154, as follow:
Final tax on export to be deducted on the export of goods u/c 154 of Income Tax Ordinance, 2001. In which each approved dealer in foreign exchange needed to gather/deduct withholding tax from exporters at the hour of acknowledgment of the export proceeds. The withholding charge rate under Section 154(1) will be 1% of the gross worth. The tax shall be the final tax regime which means final tax on export.
As per Section 154(2) each approved dealer in foreign exchange is needed to gather/deduct withholding tax from non-export indenting agent, export indenting agent/export buying house at the hour of acknowledgment of foreign exchange proceeds or indenting commission.
The Tax on export in Pakistan under this part will be on acknowledgment of continues by virtue of commission to.
- Non-export indenting agent: 5% of gross worth
- Export indenting agent / export purchasing house: 5% of gross worth
The tax shall be final tax liability.
Similarly, as per Section 154 (3), each banking organization is needed to gather/deduct charge from exporters at the hour of realization of proceeds on account by sale of products to an exporter.
The tax on export in Pakistan will be 1% on the realization of proceeds on account by the sale of products to an exporter under inland consecutive LC or some other plan as might be recommended by FBR. The tax shall be the final tax regime.
Likewise, section 154 (3A), set guidelines for Export Processing Zone (EPZ) authority. Where they needed to gather/deduct withholding tax from industrial undertaking located in the export processing zone at the time of export of goods. The tax rate will be 1% and this is last expense responsibility.
Section 154(3B), direct exporters/trade house enrolled under DTRE Rules 2001 needed to gather/deduct withholding tax from indirect exporters (characterized under sub-part 7 of the part XII of the Customs Rules, 2001) at the hour of installment against a firm agreement. The tax rate is 1% of the gross worth and it is final tax liability.
In addition, as per section 154(3C), the authority of customs is needed to gather withholding tax at 1% from exporter of merchandise at the hour of export of products. This tax shall be final tax liability.
Peoples in develop Societies pay taxes. You should also read the Benefits for Filler section articles. Which describes well about the benefits being a responsible resident of Pakistan