The Federal Board of Revenue (FBR) has granted a 100% tax credit to individuals and entities engaged in coal mining projects in Sindh, provided they supply coal exclusively to power generation projects in the province.
According to Income Tax Circular No. 1 of 2024 issued on Monday, the FBR detailed amendments made under the Finance Act 2024. Section 65F now explicitly states that the tax credit is available solely for income derived from coal mining operations in Sindh for supplying coal to power generation projects, and not for any other income.
Additionally, the FBR clarified that builders and developers must submit a computation statement on each due date for quarters, specifying the computation of advance tax based on taxable profit, gross receipts, and business bank account details, certified by a Chartered Accountant or a Cost and Management Accountant.
In the Taxation of Capital Gains (Section 37), the FBR stated that prior to the Finance Act 2024, acquirers of company shares were required to deduct tax at a rate of 10% of the fair market value.
The new amendment mandates the deduction at the time of payment or registration of shares, whichever comes first, even if payment has not been made.
The FBR also announced that the rate for toll manufacturing tax has increased to 9% for companies and 11% for other entities.
An exemption from tax has been granted to the income of Special Purpose Vehicles (SPVs) purchasing Diversified Payment Rights through Authorized Dealers under the definitions provided by the State Bank of Pakistan.
The tax exemption for residents and companies in the erstwhile Tribal Areas of Khyber Pakhtunkhwa and Balochistan has been extended until June 30, 2025.
