ISLAMABAD: The Federal Board of Revenue (FBR) Wednesday clarified that the non-resident Pakistanis are not required to file income tax return solely for the declaration of tax deduction on profit on debt on the Naya Pakistan Certificate. The FBR has revised its earlier clarification issued in response to a new item (not business recorder).

According to a modified clarification issued by the FBR here on Wednesday, the Naya Pakistan Certificate, a new instrument launched by the Government/ State Bank of Pakistan, qualifies as debt instrument in terms of Clause (5AA) of Part-II of the Second Schedule of the Income Tax Ordinance, 2001. Therefore, profit on debt on the Naya Pakistan Certificate is subject to tax @ 10% which is final tax. Moreover, such non-residents are not required to file tax return solely for the declaration of tax deduction on profit on debt. It may be added that the aforesaid concessionary tax regime is applicable to non-residents only, FBR added.

The last clarification issued by the FBR stated that only non-resident individuals can purchase Naya Pakistan Certificate who maintain bank account abroad or foreign currency account maintained in Pakistan. It is also clarified that such individuals are not required to file returns of income.

Copyright Business Recorder, 2020