ISLAMABAD: The Federal Board of Revenue (FBR) has expanded the scope of the definition of resident individual through the Finance Act, 2022.
The FBR’s income tax explanatory circular on Finance Act 2022 stated that the scope of the definition of resident individual has been further expanded through the insertion of clause (d) to section 82.
Now a person being a citizen of Pakistan whose stay in any other country is not more than 182 days during a tax year or who is not a resident taxpayer of any other country will also be treated as resident individual for the purpose of the Ordinance.
Through income tax circular number 15 of 2022, the FBR has also explained the advance tax on motor vehicles. The provision of section 231B was limited to private motor vehicles.
The scope of withholding tax has now been enhanced though omission of the word “private” from the heading and elsewhere in the section.
Further, an inclusive definition of the motor vehicle has been provided in the substituted sub-section (7) of section 231B with the following exclusions: a motor vehicle used for public transportation, carriage of goods and agriculture machinery; a rickshaw or a motorcycle rickshaw and any other motor vehicle having engine capacity up to 200cc.
The withholding tax amount required to be collected at the time of purchase or registration of motor vehicle has been enhanced with engine capacity of 1601cc and above. In cases of electric vehicles where engine capacity of a vehicle is not available and the value of the vehicle is rupees five million or more, the amount of tax collected will be three per cent of 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. Rates of tax required to be collected at the time of transfer of registration or ownership of a motor vehicle have been provided in clause (2) in the Table in Division VII of Part IV of First Schedule of the Ordinance.
A new proviso has been inserted whereby a vehicle in which engine capacity is not applicable (electric vehicles) and the value of said vehicle is rupees five million or more, then tax amount of rupees twenty thousand will be collected at the time of transfer of registration or ownership of such vehicle.
In case of a person not appearing in active taxpayer list, tax collectible under this section will increase by two hundred percent. Necessary change has been incorporated in rule 1 of Tenth Schedule of the Ordinance, the FBR added.
Copyright Business Recorder, 2022
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