Payment of Tax Through Electricity Connections
The Finance Act, 2022 has brought about certain amendments in the Income Tax Ordinance, 2001 (the Ordinance, hereafter). Some significant amendments on Payment of Tax Through Electricity Connections are explained hereunder: –
Payment of Tax Through Electricity Connections
In order to collect income tax from certain retailers and specified service providers a special fixed tax regime has been introduced through insertion of section 99A of the Ordinance.
Now retailers, other than Tier-I retailers as defined in Sales Tax Act, 1990, and specified service providers will pay fixed income tax through their commercial electricity bills which has been provided in clause (3) of Division IV of Part IV of First Schedule to the the following: –
| Gross amount of monthly bill | Tax |
| Where the amount does not exceed Rs.30,000 | Rs.3,000 |
| Where the amount exceeds Rs. 30,000 but does not exceed Rs. 50,000 | Rs.5,000 |
| Where the amount exceeds Rs. 50,000 but does not exceed Rs. 100,000 | Rs.10,000 |
| Retailers and service providers as notified by the Board in the income tax general order | Up to Rs.200,000 |
This is final tax on the income of persons covered in this section in respect of business being carried out from the premises for which tax is collected under this section.
Retailers from whom tax has been collected in terms of sub-section (9) of section 3 of Sales Tax Act, 1990 shall not be required to pay tax under section 99A of the Ordinance and the tax collected under the Sales Tax Act, 1990 is also a final discharge of income tax liability under section 99A of the Ordinance.
The Board with the approval of Minister incharge is empowered to determine the scope, mode, manner, record keeping, mechanism of collection and deduction etc and to include or exempt any person or class of person, any income or class of income through issuance of income tax general order for the purpose of this section.
Furthermore, enabling provision has been provided by inserting sub-section (1A) in section 235 of the Ordinance to collect tax through electricity bills from retailers other than Tier-I retailers as defined in Sales Tax Act, 1990 and specified service providers for the purpose of this section.
For more information on FBR’s new regulations / circulars/ SROs/ amendments in taxation laws in Pakistan please visit https://www.fbr.gov.pk/
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