FBR withdraws fixed sales tax on SIM cards

ISLAMABAD: The Federal Board of Revenue (FBR) has withdrawn the fixed sales tax on SIM cards used in mobile phones.

According to details, the sales tax on the Subscriber Identification Module (SIM) cards charged at Rs 250 per SIM card under the provision of Table-I of the Ninth Schedule to the Sales Tax Act has been abolished with effect from 1 July 2021.

Similarly, the tax department has also abolished withholding taxes on bank transactions and the purchase of used cars.

There will be no withholding tax on sending money abroad through credit or debit cards while consumers purchasing new cars will be required to register the vehicles in their names otherwise, they will be fined Rs. 200,000.

Besides, FBR has also abolished withholding taxes on domestic and international air travel, CNG, and minerals.

The tax department has also made it compulsory for businessmen to have Business Accounts to ensure the documentation of the economy. 

In addition, according to the FBR, Online marketplaces facilitating the supply of goods owned by third-party suppliers are required to withhold the sales tax at the rate of two percent of the gross value of the supplies made by persons other than active taxpayers.

It has allowed sales tax zero-rating on the local supply of raw material, components, parts, and plant and machinery to registered exporters under the Export Facilitation Scheme, 2021. The tax department has also included milk and fat-filled milk in the zero-rated regime.

To facilitate and encourage the integration of tier-1 retailers, POS machines imported for installation on retail outlets as are integrated with the Board’s Computerized System have been granted exemption from sales tax.