ISLAMABAD: The Federal Board of Revenue (FBR) has announced that the declaration of telecommunication sector as an industrial undertaking will enable the telecom companies to adjust withholding tax deducted on import of capital equipment and plant and machinery for their own use. Through an income tax circular issued by the FBR, here on Thursday, the FBR has clarified the provisions relating to the telecommunication sector have been introduced in Finance Act, 2021.

(i) Inclusion of telecommunication sector in the definition of industrial undertaking under clause (29C) of section 2 of the Ordinance.

This will enable them to adjust tax deducted under section 148 on import of capital equipment and plant & machinery for their own use.

(ii) Reduction of withholding tax rate under section 153(1) (b) on telecommunication services from eight percent to three percent under minimum tax regime.

(iii) Reduction of advance tax under section 236 on internet and mobile phone usage from 12.5 percent to 10 percent for tax year 2022 and eight percent onwards.

Copyright Business Recorder, 2021