Friday, March 31, 2023

Non-filer will pay extra tax

In an effort to extend the tax base, the federal government has levied an additional sales tax ranging between 5 and 17 percent on the provision of energy and natural gas to non-filer industrial and commercial firms.

One of the financial ideas made by the Pakistan Business Council was to impose an additional income tax and sales tax on industrial and commercial enterprises that did not previously exist on the tax roll.

As a result of an administrative decision (SRo1222, issued in 2021), an additional sales tax will be levied on the total invoiced amount, excluding the amount of federal taxes, in addition to the tax payable on supplies of electricity and natural gas to persons with industrial or commercial connections.

The additional levy will only be applicable to those entities who have not secured a sales tax registration number or who are not listed on the Federal Board of Revenue’s (FBR) active taxpayers’ list, which is updated on a regular basis.

Read Also: Tarin targets 20% tax-to-GDP ratio for FBR

Supplies to unregistered industrial entities were subject to a flat charge of 17 percent, which was applied on a monthly basis. Additionally, the tax that will be paid on the supply of electric power and natural gas to individuals who have unregistered industrial connections, which is already in place, will be supplemented by this new tax.

Unregistered commercial companies, on the other hand, were subject to a different set of tariffs.

The additional sales tax rate will be 5 percent on total billed amounts up to Rs10,000, while a 7 percent rate will be imposed on total billed amounts between Rs10,000 and Rs20,000, according to the government. 10%, 12 percent, and 15% of the total bill amount would be charged in the cases where the bill amounts ranged from Rs20,001-Rs30,000, Rs30,001-Rs40,000, and Rs40,001-R50,000, respectively.

All unregistered commercial companies will be assessed an extra 17 percent sales tax on any bill amount over $50,000 per month.

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