The Federal Board of Revenue (FBR) is planning to impose levy on shipping and air transport income of a non-resident person. Sources told Business Recorder on Tuesday that FBR is trying to broaden the tax net to achieve the target set for the current fiscal year by including all segments.
They said that every non-resident person doing business in shipping and airline sectors would have to pay tax on his earnings at the specified rate as per the Division V of Part I of the First Schedule. They said that tax would be deducted on the gross amount, received or receivable against the services provided by the company.
"The amount, which is receivable against different services provided by the company including the carriage of passengers, livestock, mail or goods inside and outside Pakistan, would be considered as taxable income," they said. They added that the deduction would be made on a specified rate.
Sources said that the tax would be deducted under sub-section-1 of Income Tax Ordinance on the gross amount. "The tax imposed under sub-section-1 on a non-resident person shall be computed by applying the relevant rate of tax to the gross amount referred to in sub-section 1".
They added that deduction would not be made for those amounts, which have been exempted from tax under the Income Tax Ordinance. "This section, which allows taxmen to deduct levy on shipping and air transport income of a non-resident person, would not apply to any amounts exempt from tax under the Ordinance," they said.