The Central Board of Revenue (CBR) has asked the advertising agents to approach the concerned Commissioner of Income Tax (CIT) for removing the practical difficulties being faced by them in dealing with tax-related matters.
In this connection, the CBR has issued instructions to Regional Commissioners of Income Tax of Corporate and Southern Regions Karachi, to guide the advertising agents.
The CBR has conveyed to the Pakistan Advertisers Association that the commission income of advertising agents, along with some other types of income were brought under Presumptive Tax Regime through Finance Act 2004. It was conscious decision to make the tax matters easy and less cumbersome for these agents.
As far as apprehensions of the advertising agencies are concerned, they should immediately contact the concerned RCIT, the CBR added.
According to a recently issued circular, under section 233 of the Income Tax Ordinance 2001, income from brokerage and commission was liable to deduction of withholding tax at the rate of 5 percent which was adjustable against final tax liability. The said section has been amended to make the deduction on commission income as final discharge of tax liability as per following rates:
(a) The rate of collection of tax under sub-section (1) of section 233 in respect of indenting commission agents, advertising agents and yarn dealers shall be 5 percent of the amount of payment.
(b) The rate of collection of tax under sub-section (1) of section 233 in respect of other commission income other than (a) above, shall be 10 percent of the amount of payment.
(c) The rate of collection of tax under sub-section (3) of section 233 shall be 10 percent of the amount of payment.