Wednesday, 30 November 2022
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Omission and merger of withholding tax provisions in finance act 2021

Omission of withholding tax provisions

There were 38 withholding tax provisions in the Income Tax Ordinance, 2001. This high number of provisions adds to complexity and creates undue burden of compliance on different withholding agents. It also impacts country’s rating on the ease of doing business index. In an effort to augment ease of business and simplify the tax laws following withholding taxes have been omitted.

ProvisionDescriptionSector
153BCollection of tax on payment of royalty to residentsRoyalty
231ACollection of tax on cash withdrawalBanking Sector
231AACollection of tax on banking instrumentsBanking Sector
236PCollection of tax on banking transactions other than
through cash
Banking Sector
236YCollection of tax from persons remitting amounts abroad through credit or debit or prepaid cards.Banking Sector
236BCollection of tax on domestic air travelAirlines
236LCollection of tax on international air travelAirlines
236VCollection of tax on extraction of mineralsMining Sector
233ACollection of tax from members by a stock exchange
registered in Pakistan
Capital Market
233AACollection of tax on marginal financing by NCCPLCapital Market
234ACollection of tax from CNG stationsCNG Sector
236HACollection of tax on certain petroleum productsCertain
petroleum
products
Omission of withholding tax provisions

Merger of withholding tax provisions

Additionally, following withholding tax provisions have been merged with other provisions to reduce complexity of law:

ProvisionDescriptionMerged with
150ADeduction of tax on return on
investment in Sukuks
Merged in section 151 for residents
and in section 152 for non-residents
which deal with such payments
152ADeduction of tax on payments
for foreign produced
commercials
Merged with section 152 which deals
with payments to non-residents
236SCollection of tax on dividend in
specie
Merged with section 150 which deals
with dividend
Merger of withholding tax provisions
Top Tax Consultants Tax Return submission Last Date
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Omissions | Merger | Withholding Tax Rates | Tax Provisions | FBR | Federal Board of Revenue | IRS | Income Tax Returns |

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