The criteria for non-resident Pakistani businessmen have been changed as they would now be required to file their income tax returns to become tax resident individuals, the Federal Board of Revenue (FBR) announced.
In accordance with the Finance Bill 2022-23, the non-resident Pakistani businessmen will have to file the returns regardless of their period of stay in Pakistan and also pay the required amount of taxes in order to become the tax resident individuals.
Meanwhile, the definition of a resident individual is changed through the Finance Act 2019 which now includes an individual who stays in Pakistan for at least 120 days during that tax year and for a total of 365 days or more over the prior four years.
According to the media, the aforementioned criterion for considering a person’s residential status is withdrawn through the Act which defines that a person’s residence status can only be determined by his physical presence in the country for a minimum of 183 days during the tax year in question.
In this regard, Ali Rao, Group CEO, Elixir Establishment, remarked; “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.”
Pakistani businessmen community welcomes the financial bill
The Federation of Pakistan Chambers of Commerce and Industry’s Businessmen Panel (BMP) has accepted the federal budget 2022-23 whole-heartedly. The BMP Chairman praised the government for removing the duty on solar panel import by supporting the demand of the industry. He commended the government for initiating an alternate dispute resolution (ADR) mechanism which, he stated, was a longstanding request of the industry.
Moreover, the FPCCI head also appreciated the elimination of the Withholding Tax (WHT) from producers and distributors, which had previously been imposed. The chief was also obliged that agricultural machinery imports were no longer subject to customs taxes.