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Introduction:
The Federal Board of Revenue (FBR) has recently announced important amendments to the Income Tax Ordinance, 2001 through Finance Act 2023, which includes significant changes to the Super Tax structure. These changes aim to broaden the scope of the Super Tax and make it a more progressive and comprehensive tax measure.
New Super Tax Slabs for Banks and Businesses:
To ensure progressivity and uniformity in the tax rate structure, the Finance Act 2023 introduces additional income slabs for Super Tax. Banks and businesses with incomes exceeding Rs300 million will now be subject to a 10% Super Tax. The new Super Tax slabs are as follows:
- Rs350 million to Rs400 million, with a Super Tax rate of 6%
- Rs400 million to Rs500 million, with a Super Tax rate of 8%
- Rs500 million and above, with a Super Tax rate of 10%
Clarity on Payment Procedure:
The Finance Act 2023 has also addressed a significant concern regarding the payment procedure for the Super Tax. It has now been clarified that the Super Tax liability should be paid in conjunction with monthly/quarterly advance tax installments, depending on the taxpayer’s circumstances. This move ensures a streamlined and efficient process for taxpayers, avoiding any ambiguity or confusion.
FBR Collects Rs532 Billion in Taxes for July 2023, Misses Target by Rs2 Billion
Contribution to Revenue Collection:
The FBR expects these changes to significantly contribute to the country’s revenue collection efforts. By introducing new Super Tax slabs and clarifying the payment procedure, the government aims to create a more equitable and fair tax system for all taxpayers.
Conclusion:
With the amendments to the Income Tax Ordinance and the introduction of new Super Tax slabs, the government seeks to enhance revenue collection while ensuring a fair and comprehensive tax measure. These changes are in line with the goal of promoting economic growth and a balanced tax system in Pakistan.
