The Federal Board of Revenue (FBR) has changed the criteria for non-resident Pakistani businessmen as they would now be required to file their income tax returns to become tax resident individuals.
Non-resident Pakistani businessmen to file returns regardless of the length of stay
According to the Finance Bill 2022-23, the non-resident Pakistani businessmen will have to file the returns irrespective of their period of stay in Pakistan and also pay the requisite amount of taxes to become the tax resident individuals. Moreover, the definition of a resident individual is expanded through the Finance Act 2019 which now includes a person who stays in Pakistan for at least 120 days during the tax year and for a total of 365 days or more over the prior four years.
According to a local news publication, the aforementioned criterion for assessing a person’s residential status is withdrawn through the Act which means that a person’s residence status can only be ascertained by his physical presence in Pakistan for at least 183 days during the tax year in question. Ali Rao, Group CEO, Elixir Establishment, said; “As a Non-Resident Pakistani, I would say that the budget is not a business-friendly budget. The overall projected budget deficit is PKR3.8 trillion, which is very high and will push Pakistan quickly to the IMF for loans.”
Business community hails the financial bill
The Federation of Pakistan Chambers of Commerce and Industry’s Businessmen Panel (BMP) has hailed the federal budget 2022-23. The BMP Chairman commended the government for removing the duty on solar panel import by agreeing to the demand of the industry. He praised the government for introducing an alternate dispute resolution (ADR) mechanism which, he said, was a longstanding demand of the industry. The FPCCI chief also applauded the elimination of the Withholding Tax (WHT) from producers and distributors, which had previously been levied he was also grateful that agricultural machinery imports were no longer subject to customs taxes.