Re: Tax Free Living in Pakistan
Yazdi: Gift, Bursary, grant, or expenses in discharge of duty is not income :) ... I think Altaf is living on gift, bursary, grant or expenses in discharge of duty paid by party :).
Re: Tax Free Living in Pakistan
Of course the tax on import and export is not income tax… but income tax is deducted at import and export stage in pakistan..This income tax is not a tax on import or export, but deducted at import/export stage…
All imports in Pakistan are subject to 5% income tax as per the fbr notification… Income tax!!!
http://www.fbr.gov.pk/newdt/ITaxRules/incometaxrule2008.pdf
- RATIONALIZATION OF WITHHOLDING TAX ON IMPORTS.
[Section 148 - Parts II & IV of Second Schedule]
Previously, advance income tax @ 6% of the value of goods was collected on import (except edible oil) which was;
(i) adjustable in the case of manufacturer; and (ii) final tax liability for commercial importers.
The salient features of amended withholding tax regime under section 148 are:
(i) the standard rate of withholding tax on import has been reduced from 6% to 5% of the value of goods;
(ii) sub-sections (3) and (4) relating to issuance of exemption certificates to manufacturer importers on the basis of payment of withholding tax or advance tax under section 147 during the year, have been omitted.
Re: Tax Free Living in Pakistan
Brother, it seems you are right that apart of import duty, Pakistan deduct withholding tax on imports (probably in the name of sales tax).
Anyhow, withholding tax is not necessarily income tax. It could be any tax that government considers could arise for various reasons that government deducts in advance, so that it can be adjusted by tax payer later.
I do not know on what category withholding tax could fall if it is imposed on imports. Most likely if withholding tax is imposed on imports than that must be part of sales tax that importers importing could adjust later. On the other hand, I believe that if import is not of commercial nature than imports must be free from such taxes and only import duty must be levied.
[Note: According to my understanding, in general, all taxes are taxes on income (or profit) and/or financial activities. Income/activities could be obvious, hidden or assumed, and taxes levied on them bear different names. Withholding tax is tax in advance that could be for any sort of tax. ‘Withholding Tax’ on bank interests, investment income, dividend, or tax deduction from salary by employer, are all considered as income tax ... but if withholding tax is used to deduct sales tax then that part of withholding tax is not income tax.]
Re: Tax Free Living in Pakistan
@Saleem bhai, would you comment any known source of income for Altaf bhai, his life syle, and the amount of tax paid by him.. nawaz thug is not the only thug in the world.. I will be interesting to know if AH has any known legitimate source of income.. I was wondering how does he pay his phone bills!!!! Somebody was saying Altaf has never paid a single paisa tax in pakistan, and never had a legitimate source of income at least in Pakistan from the time he was born.. Saleem bhai I am sure you might be knowing better.. would you care to enlighten the forum..!!!
Why not create a separate thread for this, you being a mod :)
Yazdi: Gift, Bursary, grant, or expenses in discharge of duty is not income :) ... I think Altaf is living on gift, bursary, grant or expenses in discharge of duty paid by party :).
As far as I know even 'gift' (may have to be of certain amount) is taxable, but if someone is living totally on 'grant/gift etc' then he must be paying taxes on it.
Re: Tax Free Living in Pakistan
Why not create a separate thread for this, you being a mod :)
t.
It will just start an ethnic debate which is useless/least desirable at this unfortunate moment in our history...
Re: Tax Free Living in Pakistan
Brother, it seems you are right that apart of import duty, Pakistan deduct withholding tax on imports (probably in the name of sales tax).
Anyhow, withholding tax is not necessarily income tax. It could be any tax that government considers could arise for various reasons that government deducts in advance, so that it can be adjusted by tax payer later.
I do not know on what category withholding tax could fall if it is imposed on imports. Most likely if withholding tax is imposed on imports than that must be part of sales tax that importers importing could adjust later. On the other hand, I believe that if import is not of commercial nature than imports must be free from such taxes and only import duty must be levied.
Your post shows your ignorance on the subject. Withholding tax is always income tax pre paid, on assumption of future profit at a fixed rate on the value of transaction without considering the actual profit. This with holding tax may or may not be final discharge of Income tax liability.
Sales Tax at import is totally a separate tax, nothing to do with withholding tax.
I bet you have never imported anything in Pakistan. Let me tell you how it is computed. The first tax levied on import is the custom duty which is computed on CNF value of the goods. Then Sales tax is levied, on CNF + Custom duty paid value. Finally Income tax is levied on CNF + Custom Duty + Sales Tax Value... This income tax is the minimum tax liability for a commercial importer. In case of a manufacturer this income tax is adjustable towards total income tax liability... In the same way as Sales tax paid is adjustable towards total Sales tax liability... Similar to the VAT system in UK..
In addition to imports, withholding tax/Income tax is also deducted on local supplies, services, consultancy fees, dividends, salaries, cash withdrawals from the banks, export proceeds etc etc.