Amendments of Income Tax Ordinance 2001
Finance Act 2023 to give effect to the financial proposals of the Federal Government for the year beginning on the first day of July, 2023, and to amend certain laws WHEREAS, it is expedient to make provisions to give effect to the financial proposals of the Federal Government for the year beginning on the first day of July, 2023, and to amend certain laws for the purposes hereinafter appearing. Certain laws were amended through this Finance Act, 2023.
Amendments of Income Tax Ordinance 2001
In the Income Tax Ordinance, 2001 (XLIX of 2001), the following further amendments shall be made, namely:-
(1) in section 2, –
(a) in clause (29), after the expression “section 234”, the expression “, section 236Z” shall be inserted;
(b) in clause (41), –
(i) the word “fixed”, wherever occurring, shall be omitted;
(ii) after sub-clause (ba), a new clause (bb) shall be inserted, namely: –
“(bb) virtual business presence in Pakistan including any business where transactions are conducted through internet or any other electronic medium, with or without having any physical presence;” and (iii) in sub-clause (d), after the word “personnel”, the words “or entity” shall be inserted;
(2) in section 4C, –
(a) in sub-section (2), in clause (iv), for the words “and Seventh”, the words “, Seventh and Eighth” shall be substituted; and
(b) after sub-section (5), the following new sub-section shall be added, namely:
“(5A) The provisions of section 147 shall apply on tax payable under this section.”;
(3) in section 7E, in sub-section (2), in clause (i), for the full stop at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely: –
“Provided that the exclusions mentioned at clauses (a), (e), (f) and (g) of this sub-section shall not apply in case of a person not appearing in the active taxpayers’ list, other than persons covered in rule 2 of the Tenth Schedule.”;
(4) in section 21, in clause (m), for the expression, “twenty-five thousand rupees per month”, the expression “thirty-two thousand rupees per month to an individual”, shall be substituted;
(5) in section 37A, in sub-section (1), for the second proviso, the following shall be substituted, namely: –
“Provided further that this section shall not apply to the disposal of shares –
(i) of a listed company made otherwise than through registered stock exchange and which are not settled through NCCPL;
(ii) through initial public offer during listing process except where the detail of such disposal is furnished to NCCPL for computation of capital gains and tax thereon under this section, and the provisions of section 37 shall apply on such disposal of shares of a listed company or disposal of shares through initial public offer, accordingly.”;
(6) in section 39, in sub-section (1), –
(i) in clause (l), the word “and”, occurring at the end shall be omitted; and
(ii) in clause (la), for the full stop at the end, a semicolon and the word “and” shall be added and thereafter the following new clause shall be added,
namely: –
“(lb) income arising to the shareholder of a company, from the issuance of bonus shares;”;
(7) after section 44, the following new section shall be inserted, namely: –
“44A. Exemption under Foreign Investment (Promotion and Protection) Act, 2022 (XXXV of 2022). – (1) Taxes on income (including capital gains), advance tax, withholding taxes, minimum and final taxes under this Ordinance shall, for the period and to the extent provided in the Second and Third Schedules to the Foreign Investment (Promotion and Protection) Act, 2022 (XXXV of 2022) in respect of qualified investment as specified at Sr. No.1 of the First Schedule to the said Act or investors, be exempt or subject to tax at the rate and in the manner specified under the said Act.
(2) All investors and shareholders of the qualified investment, their associates and companies specified in the Second and Third Schedules to the said Act including third party lenders on account of any loan shall also be exempt from taxes and other provisions of this Ordinance or subject to tax at the rate and in the manner specified under the said Act for the period and to the extent provided in the Second and Third Schedules to the said Act.
(3) Provisions of this Ordinance relating to Anti-Avoidance, for the period and to the extent specified in the said Act including sections 106, 106A, 108, 109 and 109A, shall not apply to the persons and amounts mentioned in sub-sections (1) and (2).
(4) Rates of depreciation, initial allowance and pre-commencement expenditure under sections 22, 23 and 25 as on the 20th day of March, 2022 shall continue to be applicable for thirty years as provided in the Third Schedule to the said Act in respect of persons mentioned in sub-sections (1) and (2).
(5) For the purpose of this section, the terms defined under the Second and Third Schedules to the said Act shall apply mutatis mutandis to this Ordinance.”;
(8) in section 85, –
(a) for sub-section (1), the following shall be substituted, namely: –
“(1) Subject to sub-section (2), two persons shall be associates where –
(i) the relationship between the two is such that one may reasonably be expected to act in accordance with the intentions of the other, or both persons may reasonably be expected to act in accordance with the intentions of a third person;
(ii) one person sufficiently influences, either alone or together with an associate or associates, the other person;
Explanation. – For the purpose of this section, two persons shall be treated as sufficiently influencing each other, where one or both persons, directly or indirectly, are economically and financially dependent on each other and, decisions are made in accordance with the directions, instructions or wishes of each other for common economic goal; or
(iii) one person enters into a transaction, directly or indirectly, with the other who is a resident of jurisdiction with zero taxation regime.”; and
(b) for sub-section (5), the following shall be substituted, namely: –
“(5) In this section, –
(i) “relative” in relation to an individual, means —
(a) an ancestor, a descendant of any of the grandparents, or an adopted child, of the individual, or of a spouse of the individual; or
(b) a spouse of the individual or of any person specified in clause (a);
(ii) jurisdiction with zero taxation regime means jurisdiction as may be prescribed.”;
(9) after section 99C, the following new section shall be inserted, namely: –
“99D. Additional tax on certain income, profits and gains. – (1) Notwithstanding anything contained in this Ordinance or any other law for the time being in force, for any of the last three tax years preceding the tax year 2023 and onwards, in addition to any tax charged or chargeable, paid or payable under any of the provisions of this Ordinance, an additional tax shall be imposed on every person being a company who has any income, profit or gains that have arisen due to any economic factor or factors that resulted in windfall income, profits or gains.
(2) The Federal Government may, by notification in the official Gazette,
(a) specify sector or sectors, for which this section applies;
(b) determine windfall income, profits or gains and economic factor or factors including but not limited to international price fluctuation having bearing on any commodity price in Pakistan or any sector of the economy or difference in income, profit or gains on account of foreign currency fluctuation;
(c) provide the rate not exceeding fifty percent of such income, profits or gains;
(d) provide for the scope, time and payment of tax payable under this section in such manner and with such conditions as may be specified in the notification; and
(e) exempt any person or classes of persons, any income or classes of income from the application of this section, subject to any conditions as may be specified in the notification.
(3) The Federal Government shall place before the National Assembly the notification issued under this section within ninety days of the issuance of such notification or by the 30th day of June of the financial year, whichever is earlier.”;
(10) in section 100B, in sub-section (1), after the word “thereon”, the words “including super tax under section 4C” shall be inserted;
(11) in section 113, in sub-section (2), in clause (c), after the second proviso, the following new Explanation shall be added, namely: –
“Explanation. – For the removal of doubt it is clarified that the aforesaid Part referred to in this clause means clause (1) of Division I or Division II of Part I of the First Schedule.”;
(12) for section 134A, the following shall be substituted, namely: –
“134A. Alternative Dispute Resolution. – (1) Notwithstanding any other provision of this 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 rupees or 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.
(2) The application for dispute resolution under sub-section (1) shall be accompanied by an initial proposition for resolution of the dispute, including an offer of tax payment.
(3) The Board may, after examination of the application of an aggrieved person, appoint a committee, within fifteen days of receipt of such application in the Board, comprising, –
(i) a retired judge not below the rank of a judge of a High Court, who shall also be the Chairperson of the Committee, to be nominated by the Board from a panel notified by the Law and Justice Division for such purpose;
(ii) the Chief Commissioner Inland Revenue having jurisdiction over the case; and
(iii) a 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;
(b) officers of the Inland Revenue Service who stood retired in BS 21 or above; or
(c) reputable businessmen as nominated by the 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.
(4) The Board shall communicate the order of appointment of Committee to the aggrieved person, court of law or the appellate authority where the dispute is pending and to the concerned Commissioner.
(5) 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 forty-five days of its appointment extendable by another fifteen days for the reasons to be recorded in writing.
(6) The decision by the Committee under sub-section (5) shall not be cited or taken as a precedent in any other case or in the same case for a different tax year.
(7) 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 the constitution of Committee till the final decision or dissolution of the Committee, whichever is earlier.
(8) The decision of the Committee under sub-section (5) shall be binding on the Commissioner when the aggrieved person, being satisfied with the decision, has withdrawn the appeal pending before the court of law or any appellate authority in respect of dispute as mentioned in sub-section (1) and has communicated the order of withdrawal to the Commissioner:
Provided that if the order of withdrawal is not communicated to the Commissioner within sixty days of the service of decision of the Committee upon the
aggrieved person, the decision of the Committee shall not be binding on the Commissioner.
(9) Subject to sub-section (10), the Commissioner shall also withdraw the appeal, if any, pending before any court of law or an appellate authority in
respect of dispute as mentioned in sub-section (1) within thirty days of the communication of the order of withdrawal by the aggrieved person to the
Commissioner.
(10) The aggrieved person shall make the payment of income tax and other taxes and within such time as decided by the Committee under sub-section (5) and all decisions and orders made or passed shall stand modified to that extent.
(11) If the Committee fails to decide within the period of sixty days under sub-section (5), 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 where the dispute is pending under litigation.
(12) The Board shall communicate the order of dissolution to the aggrieved person, court of law or the appellate authority and to the Commissioner.
(13) On receipt of the order of dissolution, the court of law or the appellate authority shall decide the appeal within six months of the communication of the said order.
(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 (ii) of sub-section (3).
(15) The Board may, by notification in the official Gazette, make rules for carrying out the purposes of this section.”;
(13) after section 146C, the following new section shall be inserted, namely:
“146D. Recovery of liability outstanding under other laws. – (1) Where any outstanding liability in or under any other statute or law for the time being in force enacted through an Act of Parliament, in respect of any defaulter is –
(a) treated as Income Tax arrears in that law;
(b) required to be recovered or collected by Commissioner (Inland Revenue); or
(c) is referred to Commissioner (Inland Revenue) for the recovery- the Commissioner (Inland Revenue) shall recover the said liability and deposit the receipts in the designated account specified in that law.”;
(14) in section 147, –
(i) in sub-section (4), in the explanation, after the word “sections”, the expression “4C,” shall be inserted;
(ii) in sub-section (4AA), after the word “sections”, the expression “4C,” shall be inserted;
(iii) in sub-section (4B), after the full stop occurring at the end, the following new explanation shall be added, namely: –
“Explanation. – For removal of doubt, it is clarified that tax assessed includes tax liability under section 4C.”;
(iv) after sub-section (5B), the following new sub-section shall be inserted, namely: –
“(5C) Notwithstanding anything contained in this section, every person deriving income from the business of –
(i) construction and disposal of residential, commercial or other buildings; or
(ii) development and sale of residential, commercial or other plots for itself or otherwise, shall be liable to pay adjustable advance tax on Project-by-Project basis, as may be prescribed, for the tax year as per the rates specified in Part IIB of the First Schedule in four equal installments:
Provided that such advance tax shall be payable to the Commissioner in accordance with sub-sections (5) and (5A):
Provided further that the provisions of sub-sections (7) to (10) shall mutatis mutandis apply.”;
(15) in section 152, in sub-section (5A), for the full stop at the end, a colon shall be substituted and thereafter the following provisos shall be added, namely: –
“Provided that the Commissioner shall be deemed to have issued the exemption certificate upon the expiry of thirty days and the certificate shall be
automatically processed and issued by Iris subject to the condition that in computing the said period of thirty days, there shall be excluded days taken for adjournment by the applicant:
Provided further that the Commissioner may modify or cancel the certificate issued automatically by Iris on the basis of reasons to be recorded in writing after providing an opportunity of being heard.”;
(16) in section 154, in sub-section (3B), after the expression “Customs Rules, 2001”, the expression “and Export Facilitation Scheme, 2021” shall be inserted;
(17) in section 154A, in sub-section (2), in clause (c), for the semicolon at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely: –
“Provided that this condition shall not apply in case of an exporter mentioned in clause (a) of sub-section (1) of this section.”;
(18) in section 164A, in the marginal note, for the words “Payment of tax collected or deducted by SWAPS agents”, the words “Settlement of transactions liable to Withholding Tax by SWAPS agents” shall be substituted;
(19) in section 168, in sub-section (3), after omitted clause (j), the following new clause shall be added, namely: –
“(k) sub-section (7) of section 236Z.”;
(20) in section 169, in sub-section (1), in clause (b), after the expression “156A or”, the expression “sub-section (7) of section 236Z” shall be inserted;
(21) in section 218, in sub-section (2), in clause (b), the word “or” occurring at the end shall be omitted;
(22) after section 230I, the following new section shall be inserted, namely: –
“230J. International Centre of Tax Excellence. – (1) There shall be established an Institute to be known as International Centre of Tax Excellence.
(2) The functions of the Institute shall be to help contribute to the development of tax policy, prepare model national tax policy, deliver interdisciplinary research in tax administration and policy, international tax cooperation, revenue forecasting, conduct international seminars, workshops and conferences on the current issues faced by tax authorities in the field of international taxation, capacity building of Inland Revenue Officers, tax analysis, improve the design and delivery of tax administration for maximising revenue within existing provisions to close the tax gap or any other function as directed by the Board or the Federal Government.
(3) There shall be a Nominating Committee comprising the Minister-in-Charge, Secretary Revenue Division and Secretary Finance which shall be responsible for recommending a panel to the Federal Government for the appointment of an Executive Director and independent members of the Executive Committee.
(4) There shall an Executive Committee comprising Chairman, Federal Board of Revenue, Member (IR-Policy), Member (IR-Operations) and two independent members to be appointed by the Federal Government. Executive Director shall act as Secretary of the Executive Committee.
(5) The Nominating Committee shall apply the prescribed criteria for making recommendations of the panel for Executive Director and independent members of the Executive Committee.
(6) Executive Director and independent members of the Executive Committee shall be appointed by the Federal Government.
(7) Executive Director shall also be the Chief Executive of the Institute and shall work to ensure efficient functioning and day to day administrative functions of the Institute and shall be independent in the discharge of its functions specified under sub-section (8).
(8) Executive Committee, for every fiscal year, shall assign the requirements of the Board to be undertaken by the Institute, during the year.
(9) The Executive Committee shall prescribe rules for recruitment of the employees of the Institute and Executive Director shall act in accordance with
the rules. At least fifty per cent of the employees shall be serving Inland Revenue officers having at least 5 years of experience of tax policy or tax administration.
(10) The remuneration and term of employment of the employees of the Institute shall be as prescribed by the Federal Government.
(11) The Board may establish a committee to monitor the establishment of the Institute including appointment of the Project Director for the purpose.
(12) The Board may, provide such data to the Institute as is necessary for processing and analysis and for discharging its obligations under sub-section (8):
Provided that such data shall be anonymized before transmission to the Institute and identifying particulars of the taxpayers shall be kept
confidential and provisions of sub-section (7) of section 216 shall apply accordingly.
(13) The Executive Committee may by notification in the official gazette make rules for carrying out the purposes of this section.”;
(23) after omitted section 231AA, the following new section shall be inserted, namely: –
“231AB. Advance tax on cash withdrawal. — (1) Every banking company shall deduct advance adjustable tax at the rate of 0.6% of the cash withdrawal from a person whose name is not appearing in the active taxpayers’ list on the sum total of the payments for cash withdrawal in a day, exceeding fifty thousand rupees.
Explanation. – For removal of doubt, it is clarified that the said fifty thousand rupees shall be aggregate cash withdrawals in a single day.”;
(24) after section 231B, the following new section shall be inserted, namely:
“231C. Advance tax on foreign domestic workers. – (1) Any authority issuing or renewing domestic aide visa to any foreign national as a domestic worker
at the time of issuing or renewing such visa shall collect from the agency, sponsor or the person as the case may be, employing the services of such foreign national a tax of two hundred thousand rupees.
(2) The tax collected or collectible under this section shall be adjustable advance tax for the tax year to which it relates on the income of such agency,
sponsor or a person, as the case may be, employing the services of such foreign national.”;
(25) in section 236C, –
(a) in sub-section (1), for the words “Any person”, the expression “Subject to sub-section (2A), any person” shall be substituted;
(b) after sub-section (2), the following new sub-section (2A) shall be inserted, namely: –
“(2A) Notwithstanding anything contained in any other law, for the time being in force, any person responsible for registering, recording or attesting transfer of any immovable property shall not register, record or attest transfer unless the seller or transferor has discharged its tax liability under section 7E and evidence to this effect has been furnished to the said person in the prescribed mode, form and manner.”;
(26) after section 236Y, the following new section shall be inserted, namely:
“236Z. Bonus shares issued by companies. – (1) Notwithstanding anything contained in any law for the time being in force, every company, issuing bonus shares to the shareholders of the company, shall withhold ten percent of the bonus shares to be issued.
(2) Bonus shares withheld under sub-section (1) shall only be issued to a shareholder, if the company collects from the shareholder, tax equal to ten percent of the value of the bonus shares issued to the shareholder including bonus share withheld, determined on the basis of day-end price on the first day of closure of books in the case of listed company and the value as prescribed in case of other companies.
(3) Tax under sub-section (2), shall be deposited by the company, within fifteen days of closure of books, whether or not tax has been collected by the company under sub-section (2).
(4) A company liable to deposit tax under this section shall be entitled to collect and recover the tax deposited from the shareholder, on whose behalf the tax has been deposited, before the issuance of bonus shares.
(5) If a shareholder neither makes payment of tax to the company nor collects its bonus shares, within fifteen days of the date of issuance of bonus shares, the company may proceed to dispose of its bonus shares to the extent it has paid tax on its behalf under this section.
(6) Issuance of bonus shares shall be deemed to be the income of the shareholder and the tax collected by a company under this section or proceeds of the bonus shares disposed of and paid under this section shall be treated to have been paid on behalf of the shareholder.
(7) Tax paid under this section shall be final tax on the income of the shareholder of the company arising from issuing of bonus shares.”;
(27) in the First Schedule, –
(A) in Part I, –
(1) in Division I, –
(a) in clause (1), for the Table, the following shall be substituted, namely: –
“TABLE
| S# | Taxable Income | Rate of Tax |
| (1) | (2) | (3) |
(b) in clause (2), for the Table, the following shall be substituted, namely: –
“TABLE
| S# | Taxable Income | Rate of Tax | |
| (1) | (2) | (3) | |
| 1. | Where taxable income does not
exceed Rs. 600,000/- |
0% | |
| 2. | Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000 | 2.5% of the
amount exceeding Rs. 600,000 |
|
| 3 | Where taxable income exceeds Rs. 1,200,000 but does not exceed Rs.
2,400,000 |
Rs. 15,000 +
12.5% of the amount exceeding Rs. 1,200,000 |
|
| 4. | Where taxable income exceeds Rs.
2,400,000 but does not exceed Rs. 3,600,000 |
Rs. 165,000 +
22.5% of the amount exceeding Rs. 2,400,000 |
|
| 5. | Where taxable income exceeds Rs. 3,600,000 but does not exceed Rs. | Rs. 435,000 +
27.5% of the |
| 6,000,000 | amount exceeding
Rs. 3,600,000 |
||
| 6. | Where taxable income exceeds Rs.
6,000,000 |
Rs. 1,095,000 +
35% of the amount exceeding Rs. 6,000,000. |
”; |
(1A) in Division IIB, for the Table, the following shall be substituted, namely: –
“Table
| S. No | Income under section 4C | Rate of tax | |
| For tax year
2022 |
For tax year
2023 and onwards |
||
| (1) | (2) | (3) | (4) |
| 1. | Where income does not exceed Rs.
150 million |
0% of the
income |
0% of the
income |
| 2. | Where income exceeds Rs. 150
million but does not exceed Rs. 200 million |
1% of the
income |
1% of the
income |
| 3. | Where income exceeds Rs. 200
million but does not exceed Rs. 250 million |
2% of the
income |
2% of the
income |
| 4. | Where income exceeds Rs. 250
million but does not exceed Rs. 300 million |
3% of the
income |
3% of the
income |
| 5. | Where income exceeds
Rs. 300 million but does not exceed Rs. 350 million |
4% of the income |
4% of the
income |
| 6. | Where income exceeds
Rs. 350 million but does not exceed Rs. 400 million |
6% of the
income |
|
| 7. | Where income exceeds
Rs. 400 million but does not exceed Rs. 500 million |
8% of the
income |
|
| 8. | Where income exceeds
Rs. 500 million |
10% of the
income:”; |
|
(1B) in Division VII, in the first proviso, for paragraph (ii), the following shall be substituted, namely: –
“(ii) the rate of 12.5% tax shall be charged on capital gain arising on disposal where the securities are acquired on or after the first day of July, 2013 but on or before the 30th day of June, 2022; and
(iii) the rate of 0% tax shall be charged on capital gain arising on disposal where the securities are acquired before the first day of July, 2013:”;
(B) in Part II, in the Table, in column (1), against S. No. 3, in column (3), after the words “federal excise duty”, the expression “and 6% of the import value as increased by customs duty, sales tax and federal excise duty in case of a commercial importer:” shall be added;
(B1) after omitted Part IIA, the following new Part IIB shall be inserted, namely: –
“Part IIB
Rates of Advance Tax
[see sub-section (5C) of section 147]TABLE
| Rate in respect of | |||
| (1) | (2) | (3) | (4) |
|
Area in |
Karachi, Lahore and Islamabad |
Hyderabad, Sukkur,
Multan, Faisalabad, Rawalpindi, Gujranwala, Sahiwal, Sialkot, Bahawalpur, Peshawar, Mardan, Abbottabad, Quetta |
Urban Areas not specified in columns (2) and (3) |
| TAX ON PERSONS FALLING UNDER SECTION 147(5C)(i) FOR COMMERCIAL BUILDINGS | |||
| Sq. Ft. | – | – | – |
| Any size | Rs.250 per Sq.
ft. |
Rs. 230 per Sq. ft. | Rs. 210 per Sq. ft. |
| TAX ON PERSONS FALLING UNDER SECTION 147(5C)(i) FOR RESIDENTIAL BUILDINGS | |||
| Sq. Ft. | – | – | – |
| upto 3000 | Rs.80 per Sq.
ft. |
Rs. 65 per Sq. ft. | Rs. 50 per Sq. ft. |
| 3000 and
above |
Rs. 125 per Sq.
ft. |
Rs. 110 per Sq. ft. | Rs. 100 per Sq.
ft. |
| TAX ON PERSONS FALLING UNDER SECTION 147(5C)(ii) | |||
| Sq. Yds. | – | – | – |
| Any size | Rs. 150 per Sq.
yd |
Rs. 130 per Sq. yd | Rs. 100 per Sq.
yd |
| TAX ON PERSONS FALLING UNDER SECTION 147(5C)(ii) FOR DEVELOPMENT
OF INDUSTRIAL AREA |
|||
| Sq. Yds. | – | – | – |
| Any size | Rs. 20 per Sq.
yd |
Rs. 20 per Sq. yd | Rs. 10 per Sq.
yd: |
Provided that in case of mixed use buildings having both commercial and residential areas, respective rates mentioned above shall apply:
Provided further that in case of development of plots and constructing buildings on the same plots as one project, both rates shall
apply.”;
(C) in Part III, –
(1) in Division II, –
(i) in paragraph (4), in sub-paragraphs (i) and (ii), for the expressions “4%” and “4.5%”, the expressions “5%” and “5.5%” shall be substituted respectively;
(ii) in paragraph (5), –
(a) in sub-paragraph (i), for the expression “3%”, the expression “4%” shall be substituted; and
(b) in sub-paragraph (ii), in clauses (a) and (b), for the expressions “8%” and “10%”, the expressions “9%” and “11%” shall be substituted respectively;
(iii) in paragraph (6), in sub-paragraph (ii), for the expression “7%”, the expression “8%” shall be substituted;
(2) in Division III, –
(i) in paragraph (1), in sub-paragraph (b), for the expressions “4%” and “4.5%”, the expressions “5%” and “5.5%” respectively shall be substituted;
(ii) in paragraph (2), –
(a) in sub-paragraph (i), for the expression “3%”, the expression “4%” shall be substituted;
(b) in sub-paragraph (ii), in clauses (a) and (b), for the expressions “8%” and “10%”, the expressions “9%” and “11%” respectively shall be substituted;
(iii) in paragraph (3), in sub-paragraphs (ii) and (iii), for the expressions “6.5%” and “7%”, the expressions “7.5%” and “8%” respectively shall be substituted.”;
(3) in Division IVA, in the Table, in column (1), in S. No.1, in column (3), after the word “proceeds”, the expression “for tax years 2024 up to
tax year 2026” shall be added; and (D) in Part IV, –
(i) in Division VII, for clause (1), the following shall be substituted, namely: –
“(1) The rate of tax under sub-sections (1) and (3) of section 231B shall be as set out in the following Table: –
Table
| 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 |
| Rate of Tax | ||
| 7. | 2001cc to 2500cc | 6% of the value |
| 8. | 2501cc to 3000cc | 8% of the value |
| 9. | Above 3000cc | 10% of the value: |
Provided that the value for the purpose of S. Nos. 7 to 9 of the above Table shall be in case of motor vehicle –
(i) imported in Pakistan, the import value assessed by the Customs authorities as increased by customs duty, federal excise duty and sales tax payable at import stage;
(ii) manufactured or assembled locally in Pakistan, the invoice value inclusive of all duties and taxes; or
(iii) auctioned, the auction value inclusive of all duties and taxes:
Provided further 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.”;
(ii) in Division VIII, in the proviso, after the word “auction”, the words “and sale by auction of train management services by Pakistan Railways” shall be inserted;
(iii) in Divisions X and XVIII, for the expression “2%”, the expression “3%” shall be respectively substituted; and
(iv) in Division XXVII, for the expression “1%”, the expression “5%” shall be substituted;
(28) in the Second Schedule, –
(A) in Part I, –
(i) in clause (66), in sub-clause (1), in Table 1, in column (1), after S. No
(lxii), the following new S. Nos. and entries relating thereto in column (2) shall be added, namely: –
“(lxiii) The Prime Minister’s Relief Fund for Flood, Earthquake and Other Calamities with effect on and from the 5th August, 2022.
(lxiv) Film and Drama Finance Fund
(lxv) Export-Import Bank of Pakistan
(lxvi) Shaheed Mohtarma Benazir Bhutto Institute of Trauma, Karachi
(lxvii) Shaheed Zulfikar Ali Bhutto Institute of Science and Technology
(ii) in clause (66), in sub-clause (2), in Table 2, in column (1), after S. No
(xlv) and entry relating thereto in column (2), the following new S. Nos. and entries relating thereto in column (2) shall be added, namely: –
“(xlvi) Balochistan Bar Council
(xlvii) Islamabad Bar Council
(xlviii) Khyber Pakhtunkhwa Bar Council
(xlix) Punjab Bar Council
(l) Sindh Bar Council
(li) Shaheed Zulfikar Ali Bhutto Foundation (SZABF)
(iii) in clause (145A), for the figure, “2023”, the figure “2024” shall be substituted;
(iv) in clause (150), after the word “Limited”, the words “and Alteraz Engineering Consultant” shall be inserted; and
(C) in Part IV, –
(i) in clause (11A), after sub-clause (xlv), the following new sub-clause shall be added, namely: –
“(xlvi) The Prime Minister’s Relief Fund for Flood, Earthquake and Other Calamities with effect on and from the 5th August, 2022.”;
(ii) clause (100) shall be omitted;
(iii) in clauses (109A) and (110), for the figure “2023”, the figure “2024” shall be respectively substituted;”; and
(iv) after clause (120), the following new clauses shall be added, namely:
“(121) The provisions of section 151 shall not apply to the Prime Minister’s Relief Fund for Flood, Earthquake and other calamities with effect on and from the 5th August, 2022.
(122) The provisions of section 236 shall not apply on the amount donated through SMS to the Prime Minister’s Relief Fund for Flood, Earthquake and other calamities with effect on and from the 5th day of August, 2022.
(123) The provisions of section 148 shall for a period of three months from the 1st day of December, 2022 not apply to goods required and imported for relief operation for flood affectees, duly certified by the National Disaster Management Authority or the Provincial Disaster Management Authority.
(124) The provisions of section 148 shall not apply to tomato (PCT heading 0702.0000) and onion (PCT heading 0703.1000)
imported till the 31st day of December, 2022.”;
(29) in the Fourth Schedule, after rule 6DA, the following new rule shall be added, namely: –
“(6DB) The provisions of section 99D shall apply to the taxpayers under this Schedule.”;
(30) in the Fifth Schedule, in Part I, after rule 4AB, the following new rule shall be inserted, namely: –
“(4AC) The provisions of section 99D shall apply to the taxpayers under this Schedule.”;
(31) in the Seventh Schedule, –
(a) in rule 7CA, for the figure “2022”, the figure “2023” shall be substituted;
(b) after rule 7CA, amended as aforesaid, the following new rule shall be added, namely: –
“(7CB) The provisions of section 99D shall apply to the taxpayers under this Schedule.”
(c) in rule 8, after sub-rule (3), the following new sub-rules shall be added, namely: –
“(4) Profit on debt and capital gains from Federal Government’s sovereign debt or a sovereign debt instrument shall be exempt from tax chargeable under this Ordinance, derived by any non-resident banking company approved by the Federal Government under a sovereign agreement for the purpose of this sub-rule.
(5) The provisions of sub-rule (6A) of rule 6C shall not apply to a banking company for tax year 2024.”;
(32) in the Eighth Schedule, after rule 4, the following new rule shall be inserted, namely:
“4A. Computation, collection and payment of tax under section 4C. – In addition to capital gains tax, NCCPL shall also compute and collect tax under section 4C at the rates specified in Division IIB of Part I of the First Schedule on the amount of capital gains computed under this Schedule in the manner specified in this Schedule and rules made thereunder.”;
(33) in the Tenth Schedule, in rule 10, after omitted sub-rule (g), the following new sub- rule shall be inserted, namely: –
“(ga) tax deducted under section 231AB;”.
(34) in the Thirteenth Schedule, in the Table, in column (1), after S. No 63 and entries relating thereto in column (2), the following new S. Nos. and entries relating thereto in column (2) shall be added, namely: –
The Prime Minister’s Relief Fund for Flood, Earthquake and Other Calamities with effect on and from the 5th August, 2022.
Film and Drama Finance Fund.” ;
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