New advance tax imposed on construction, residential businesses

ISLAMABAD: Finance Act 2023 has imposed a new advance tax on the construction, development and disposal of commercial and residential businesses.

Under the Finance Act 2023, the new advance tax will be collected on a Project to Project basis.

Through the Finance Bill 2023 a concession was proposed to persons of Pakistan origin from the collection of advance tax on purchase of immovable property. This concession is proposed to be removed. This is not a correct step as such persons are generally not taxable in Pakistan and tax paid is not adjustable against income in Pakistan.

The perpetual tax amnesty available under section 111(4) of the Income Tax Ordinance which was limited to a sum of Rs 5 million for remittance from outside Pakistan in a tax year was proposed to be increased to USD 100,000 has been removed. The amnesty is now available at the old limit of Rs 5 million, according to the Finance Act 2023.

Copyright Business Recorder, 2023