15 of 212016

Finance Act, 2016, as published 2016

This is the Finance Act, 2016, as published by the Federal Board of Revenue in 2016. It runs to 215 pages and contains 13 sections.

Transcribed from page images. This document had no text layer, so its 215 pages were read and transcribed from the scanned images. Check figures, dates and tables against the official PDF before relying on them.

What this document is

The Federal Board of Revenue publishes this document in its Finance Act collection. It is reproduced here as printed in the source file, without later amendments folded in.

The source file states no date, so the year above is when the Federal Board of Revenue published the file. Treat it as approximate.

The shape of this document

The operative text holds roughly 17,828 words across 13 sections.

The source file


File name	`2016630964223942FinanceBill2016-2017.pdf`
Pages	215
Size	28.02 MB
Text extraction	Transcribed from page images
Extraction confidence	medium
Position in this collection	7 of 21

SHA-256 of the source PDF:

601d74e06736e7935dbbb58ce700b8793fbfe08172403c00d4204d59a53c3286

Checking that value against the file you download confirms it is the same document these figures came from.

A note on these figures

Counts here are produced by software reading the PDF, not compiled by hand. The same method is applied to every document, which makes comparisons between versions meaningful, but a section with unusual formatting can be missed. Treat them as close measurements and the official document as the authority.

This is information, not legal or tax advice. Qanoon Digest is independent and not affiliated with the Federal Board of Revenue or the Government of Pakistan.

The full text of this document

All 13 sections as they appear in this document, reproduced from the source PDF. Amendment footnotes follow at the end.

Tables are not shown here. The source prints tables (such as rate schedules or forms) that are left out of the text below. Use the official PDF for them.

1. Short title, extent and commencement

(1) This Act may be called the Finance Act, 2016.

(2) It extends to the whole of Pakistan.

(3) It shall come into force on and from the first day of July, 2016, except the following provisions thereof which shall come into force on next day following the assent of the President of the Islamic Republic of Pakistan given to this Act, namely:-

(I) clauses (4) and (5) of section 2;

(II) in section 3,-

(a) in clause (15), sub-clause (a),-

(i) paragraph (iii); and

(ii) in paragraph (vi), in the Table, S. No. 133 thereof;

(b) in clause (16), in sub-clause (I),-

(i) paragraph (C); and

(ii) paragraph (E) excluding S. No. 34 of the Table thereunder; and

(III) in section 7, in clause (8), sub-clause (a); and

(IV) the First Schedule and the Second Schedule.

2. Amendments of Customs Act, 1969 (IV of 1969)

In the Customs Act, 1969 (IV of 1969), the following further amendments shall be made, namely.-

(1) in section 19, in sub-section (1),-

(a) after the word “areas”, for the word “and”, a comma shall be substituted; and

(b) after the word “agreements”, the words and comma “and to any international financial institution or foreign government-owned financial institution operating under a memorandum of

understanding, an agreement or any other arrangement with the Government of Pakistan” shall be inserted;

(2) in section 155H, in clause “(c)”, after the semi colon, the word “or” shall be added and thereafter the following new clauses shall be added; namely:-

“(d) sharing of data to the extent of agreed data contents under a memorandum of understanding, bilateral, regional, multilateral agreements or conventions; or

(e) public disclosure of valuation data through any medium containing description of items, origin, currency, declared and assessed unit value without disclosing name and address of the importer or exporter or their suppliers;

(3) in section 195C,-

(a) in sub-section (2), after the word “customs”, the words “not below the rank of Collector” shall be inserted;

(b) in sub-section (4),-

(i) for the word “forty-five”, the word “ninety”, shall be substituted; and

(ii) for the full stop at the end a semi colon shall be substituted and thereafter the following proviso shall be added, namely:-

“Provided that if such order is not passed within the aforesaid period, recommendations of the committee shall be treated to be an order passed by the Board under this sub-section.”; and

(c) in sub-section (5), after the expression “(4)”, the expression “or as per recommendations of the committee in terms of proviso to sub-section (4), as the case may be,” shall be inserted. ; and

(4) the amendments set out in the First Schedule to this Act shall be made in the First Schedule to the Customs Act, 1969 (IV of 1969); and

(5) the Fifth Schedule to the Customs Act, 1969 (IV of 1969), shall be substituted in the manner specified in the Second Schedule to this Act.

3. Amendments of the Sales Tax Act, 1990

In the Sales Tax Act, 1990, the following further amendments shall be made, namely:-

(1) in section 2,-

(i) in clause (5AB), for the word “five”, the word “ten” shall be substituted;

(ii) in clause (9),-

(a) the expression “and section 26AA” shall be omitted; and

(b) after the semi-colon at the end, the following shall be substituted, namely:-

“and different dates may be specified for furnishing of different parts or annexures of the return;”; and

(iii) in clause (14),-

(a) in sub-clause (c), the word “and” at the end shall be added; and

(b) sub-clause (d) shall be omitted;

(2) in section 6, in sub-section (2), for the words “at the time of filing the return in respect of that tax period under Chapter-V”, the words “by the date as prescribed in this respect” shall be substituted;

(3) in section 7, in sub-section (2), in clause (i), for the semi-colon at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely:-

“Provided that from the date to be notified by the Board in this respect, in addition to above, if the supplier has not declared such supply in his return or he has not paid amount of tax due as indicated in his return;”;

(4) in section 8, in sub-section (1), in clause (l), after the word “return”, occurring at the end, the following shall be added, namely:-

“or he has not paid amount of tax due as indicated in his return.”;

(5) in section 11, after sub-section (4), the following new sub-section shall be inserted, namely:-

“(4A) Where any person, required to withhold sales tax under the provisions of this Act or the rules made thereunder, fails to withhold the tax or withholds the same but fails to deposit the same in the prescribed manner, an officer of Inland Revenue shall after a notice to such person to show cause, determine the amount in default.”;

(6) in section 13, in sub-section (2), in clause (a),-

(i) for the word “and”, occurring for the first time, a comma shall be substituted; and

(ii) after the word “agreements”, the words “and matters relating to international financial institutions or foreign government-owned financial institutions” shall be inserted;

(7) in section 26, sub-section (2) shall be omitted;

(8) after section 30DD, the following new section shall be inserted, namely:-

“30DDD. Directorate General of Input Output Co-efficient Organization.-The Directorate General of Input Output Co-efficient Organization (IOCO)-Inland Revenue shall consist of a Director General and as many Directors, Additional Directors, Deputy Directors, Assistant Directors and such other officers as the Board may, by notification in the official Gazette, appoint.”;

(9) in section 33, in the Table, in the entry in column (1), against serial number 19, after the word “Act”, the words “or the rules made thereunder” shall be inserted;

(10) in section 47A,-

(i) in sub-section (2), the word “Additional” shall be omitted; and

(ii) in sub-section (4),-

(A) for the word “forty-five”, the word “ninety” shall be substituted; and

(B) for the full stop at the end, a colon shall be substituted, and thereafter the following new proviso shall be added, namely:-

“Provided that if such order is not passed by the Board within the aforesaid period, the recommendation of the Committee shall be treated to be an order passed by the Board under this sub-section.”;

(11) in section 49, for sub-section (2), the following shall be substituted, namely:-

“(2) In the case of sale or transfer of ownership of a taxable activity or part thereof to another registered person as an ongoing concern, the taxable goods or part thereof shall be transferred to the new owner through a zero-rated invoice and the sales tax chargeable thereon shall be accounted for and paid by the registered person to whom such taxable activity or part thereof is transferred.”;

(12) for section 56B, the following shall be substituted, namely:-

“56B. Disclosure of information by a public servant.-(1) Any information acquired under any provision of this Act shall be confidential and no public servant shall disclose any such information, except as provided under section 216 of the Income Tax Ordinance, 2001 (XLIX of 2001).

(2) Notwithstanding anything contained in sub-section (1) and the Freedom of Information Ordinance, 2002 (XCVI of 2002), any information received or supplied in pursuance of bilateral or multilateral agreements with government of foreign countries for exchange of information under section 56A shall be confidential.“;

(13) in the Third Schedule, in column (1), after omitted serial number 36 and entries relating thereto in columns (2) and (3), the following new entry and corresponding entries relating thereto shall be inserted, namely:-

(14) in the Fifth Schedule, in column (1), against serial number 12, in column (2), clauses (i) to (ix) and (xviii) shall be omitted:

(15) in the Sixth Schedule,-

“(a) in Table-I, in column (1),-

(i) after serial number 100 and entries relating thereto in columns (2) and (3), the following new serial numbers and corresponding entries thereto shall be inserted and thereafter Annex-I shall be added, namely:-”

Annex-I

Header Information

NOTE 1.-Before certifying, the authorized officer of the Ministry of Ports and Shipping shall ensure that the goods are genuine and bona fide requirement for construction and operation of Gwadar Port and development of Free Zone for Gwadar Port.

Signature____________ Designation ____________

NOTE 2.-In case of clearance through Pakistan Customs Computerized System, the above information shall be furnished online against a

specific user I.D. and password obtained under section 155D of the Customs Act, 1969 (IV of 1969)” ;

(ii) (a) against serial number 103, in column (2), the expression “of gross tonnage of less than 15 LDT” shall be omitted,

(b) against serial number 105, in column (2), for the word “ten”, the word “eleven” shall be substituted;

(i) against sub-serial (b), in column (3), for the figure “8539.3990”, the figure “8539.3290” shall be substituted;

(ii) against sub-serial (c), in column (3), for the figure “9405.1090”, the figure “8539.3290, 8543.7090 and 9405.4090” shall be substituted; and

(d) after sub-serial (g) and the entries relating thereto in column (3), the following sub-serials and the entries relating thereto shall be added, namely:-

(iii) serial number 111 and entries relating thereto in columns (2) and (3) shall be omitted;

(iv) serial number 119 and the entries relating thereto in columns (2) and (3) shall be omitted;

(v) in serial number 123, after the word “lease”, a colon and the following proviso shall be added, namely:-

“Provided that in case of import or acquisition on wet or dry lease by Pakistan International Airlines Corporation, this exemption shall be available with effect from 19th March, 2015”; and

(vi) after serial number 129 and entries relating thereto in columns (2) and (3), the following new serial numbers and corresponding entries thereto shall be inserted, namely:-

(e) in Table-3, in the Annexure, in column (1),-

(i) against serial number 4, in column (2), after the word “pick-ups”, the words “and dump trucks” shall be inserted; and

(ii) against serial number 14, in column (2),-

(A) against sub-serials (c) and (d), in column (3), for the figures “8539.3910”, occurring twice, the figure “8539.3110” shall be substituted; and

(B) against sub-serial (i), in column (3), for the figure “8539.3920”, the figure “8539.3120” shall be substituted;

(16) in the Eight Schedule,-

(I) in Table-1, in column (1),-

(A) against serial number 15,-

(a) in column (3),-

(i) for the figure “2301.2090”, the figure “2301.1000 (Meat and Bone Meal)” shall be substituted;

(ii) for the figure “2301.2010”, the figure “2301.2090” shall be substituted;

(iii) for the figure “2833.2600”, the figure “2833.2940” shall be substituted; and

(iv) for the figure “2923.9000 (Betafin)”, the figure “2923.9010 (Betaine)” shall be substituted; and

(b) in column (4), for the figure “5”, the figure “10” shall be substituted;

(B) against serial number 20, in column (2), for the words “equipment and specific items”, the words “and equipment” shall be substituted;

(D) against serial number 26, in column (2), after entry (xix) and the entries relating thereto in column (3), the following new entries shall be added, namely:-

and

(E) serial number 31 and entries relating thereto in columns (2), (3) and (4) shall be omitted and thereafter the following new serial numbers and corresponding entries relating thereto shall be inserted, namely:-

and

(II) in Table-2, in the Annexure, in column (1),-

(A) against serial number 1, in column (2), after the word “facilities”, the words “including silos” shall be inserted; and

(B) after serial number 7 and the entries relating thereto in columns (2), (3) and (4), the following new serial number and the entries relating thereto shall be added, namely:-

and

(17) in the Ninth Schedule, in the Table, in column (1), against S. No. 2, in column (2),-

(a) against category B, in columns (3) and (4), for the figure “500” the figure “1000” shall be substituted; and

(b) against category C, in column (3) and (4), for the figure “1000” the figure “1500” shall be substituted.

4. Amendment of Islamabad Capital Territory (Tax on Services) Ordinance, 2001 (XLII of 2001)

In the Islamabad Capital Territory (Tax on Services) Ordinance, 2001 (XLII of 2001), the following further amendments shall be made, namely:-

(1) in section 3, after sub-section (2), the following new sub-sections shall be inserted, namely:-

“(2A) The following provisions of the Sales Tax Act, 1990, shall apply, mutatis mutandis, to the services rendered or provided under this Ordinance, namely:-

(a) clause (b) of sub-section (2) and sub-sections (6) and (7) of section 3;

(b) serial number 2, in column (1), and the entries relating thereto of the Fifth Schedule read with section 4;

(d) serial number 48, in column (1), and entries relating thereto of Table I of Sixth Schedule read with section 13.“.

(2B) The tax levied under sub-section (1) shall not be applicable to regulatory and licensing services rendered or provided by an organization established by or under a Federal statute.“; and

(2) in the Schedule, for S.No.37, in column (1), and the entries relating thereto in columns (2), (3) and (4), the following shall be substituted, namely:-

5. Amendment of Ordinance, XLIX of 2001

In the Income Tax Ordinance, 2001 (XLIX of 2001), the following further amendments shall be made, namely:-

(1) in section 4B,-

(a) in sub-section (1), for the word and figure “year 2015” the expression “years 2015 and 2016” shall be substituted; and

(b) in sub-section (2), after the word “income”, occurring for the second time, the brackets and words “(other than brought forward depreciation and brought forward business losses)” shall be inserted;

(2) after section 7B, the following new sections shall be inserted, namely:-

“7C. Tax on builders.-(1) Subject to this Ordinance, a tax shall be imposed on the profits and gains of a person deriving income from the business of construction and sale of residential, commercial or other buildings at the rates specified in Division VIIIA of Part I of the First Schedule.

(2) The tax imposed under sub-section (1) shall be computed by applying the relevant rate of tax to the area of the residential, commercial or other building being constructed for sale.

(3) The Board may prescribe:

(a) the mode and manner for payment and collection of tax under this section;

(b) the authorities granting approval for computation and payment plan of tax; and

(c) responsibilities and powers of the authorities approving, suspending and cancelling no objection certificate to sell and the matters connected and ancillary thereto.

(4) This section shall apply to business or projects undertaken for construction and sale of residential, commercial or other buildings initiated and approved after the 1st July, 2016.”

6. Amendments of the Fiscal Responsibility and Debt Limitation Act, 2005 (VI of 2005)

In the Fiscal Responsibility and Debt Limitation Act, 2005 (VI of 2005), the following further amendments shall be made, namely:-

(1) for the long title and the preamble, the following shall be substituted, namely:-

“An Act to provide for reduction of Federal fiscal deficit and ratio of public debt to gross domestic product to a prudent level by effective public debt management

WHEREAS it is expedient to provide for reduction of Federal fiscal deficit and ratio of public debt to gross domestic product to a prudent level by effective debt management and for matters connected therewith and incidental thereto;

It is hereby enacted as follows:-“;

(2) in section 2,-

(a) in clause (a), after the word “Constitution” the words “of the Islamic Republic of Pakistan” shall be inserted;

(b) clause (b) shall be omitted;

(d) for clause (k), the following shall be substituted, namely:-

“(k) “Federal fiscal deficit” means the difference between total net revenue receipts and total expenditure of the Federal Government;“;

(e) clause (l) shall be omitted;

(f) for clause (m), the following shall be substituted, namely:-

“(m) “total expenditure” means a sum of total recurrent expenditure, development expenditure and net lending of the Federal Government;“;

(g) clause (n) shall be omitted;

(h) for clause (o), the following shall be substituted, namely:-

“(o) “total public debt” means the debt of the Government (including the Federal Government and the Provincial Governments) serviced out of the Consolidated Fund and debts owed to the International Monetary Fund;” and

(i) in clause (p), for full stop at the end, a semicolon and the word “and” shall be substituted and thereafter the following new clause shall be added, namely:-

“(q) “total net revenue of Federal Government” means a sum of tax revenues, non-tax revenues and surcharges of the Government minus transfer of provincial share.“;

(3) in section 3,-

(a) for sub-section (2), the following shall be substituted, namely:-

“(2) The Federal Government shall take all appropriate measures to reduce the Federal fiscal deficit excluding foreign grants and ratio of total public debt to gross domestic product and maintain it within prudent limits thereof.”;

(b) in sub-section (3), for clauses (a), (b) and (c), the following shall be substituted, namely:-

“(a) limiting the Federal fiscal deficit excluding foreign grants to four percent of gross domestic product during the three years, beginning from the financial year 2017-18 and maintaining it at a maximum of three and a half percent of the gross domestic product thereafter;

(b) ensuring that within a period of two financial years, beginning from the financial year 2016-17, the total public debt shall be reduced to sixty percent of the estimated gross domestic product;

(c) ensuring that within a period of five financial years, beginning from the financial year 2018-19 total public debt shall be reduced by 0.5 percent every year and from 2023-24 and going up to financial year 2032-33 a reduction of 0.75 percent every year to reduce the total public debt to fifty percent of the estimated gross domestic product and thereafter maintaining it to fifty percent or less of the estimated gross domestic product; and”;

(4) in section 4, after clause (c), for the proviso, the following shall be substituted, namely:-

“Provided that where the National Assembly is not in session, the statements may be laid in the next session even if it occurs after the end of the period specified in sub-section (2).”;

(5) in section 6, in sub-section (2),-

(a) for clause (b), the following shall be substituted, namely:

“(b) total net revenue receipts;”; and

(b) for clause (d), the following shall be substituted, namely:-

“(d) total Federal fiscal deficit excluding foreign grants; and”;

“(f) debt per capita.”;

(6) in section 7, in sub-section (3),-

(a) clause (c) shall be omitted;

(b) for clause (e), the following shall be substituted, namely:-

“(e) consistent and authenticated information on public and external debt and guarantees issued by the Federal Government;”;

(7) in section 9, for the proviso, the following shall be substituted, namely:-

“Provided that nothing in this section shall apply to the expenditure charged upon the Federal Consolidated Fund.”;

(8) in section 10,-

(a) in sub-section (1), for the expression “Every statement prepared under sections 5, 6 and 7 shall be accompanied by a statement of responsibility signed by the Minister and the Secretary of Finance and comprising-”, the following shall be substituted, namely:-

“Every statement prepared under sections 5, 6 and 7 shall include-”; and

(b) in sub-section (2), for the expression “A statement of the Minister’s responsibility shall, inter alia, provide for-”, the following shall be substituted, namely:-

“The statement under clause (a) of sub-section (1) shall additionally provide for-”;

(9) in section 13,-

(a) in sub-section (2), for clause (a), the following shall be substituted, namely:-

“(a) prepare a debt reduction path to achieve the principles of sound fiscal and debt management;”; and

(b) sub-section (3) shall be omitted; and

(10) in section 14,-

(a) in sub-section (1), for the word “Minister”, the expression “Federal Government” shall be substituted; and

(b) for sub-section (2), the following shall be substituted, namely:-

“(2) The statement published under sub-section (1) shall, within fifteen days of the publication, be posted on website of the Federal Government.”.

7. Amendments of the Federal Excise Act, 2005

In the Federal Excise Act, 2005, the following further amendments shall be made, namely:-

(1) in section 2, in clause (8a), for the full stop at the end, the expression “and different dates may be specified for furnishing of different parts or annexures of the return;” shall be substituted;

(2) in section 4,-

(a) in sub-section (2), for the words “at the time of filing of his return under sub-section (1)”, the words “by the date as prescribed in this respect” shall be substituted; and

(b) sub-section (3) shall be omitted;

(3) in section 6, after sub-section (2), the following new sub-section shall be inserted, namely:-

“(2A) From the date to be notified by the Board, adjustment of duty of excise under sub-section (1) shall be admissible only if the supplier of input goods and services has declared such supply

in his return and he has paid amount of tax due as indicated in his return.“;

(4) in section 16, in sub-section (2),-

(a) for the word “and”, occurring for the first time, a comma shall be substituted; and

(b) after the word “agreements”, the words “and matters relating to international financial institutions or foreign government-owned financial institutions” shall be inserted;

(5) in section 19, after sub-section (12), the following new sub-section shall be added, namely:-

“(13) Any person who contravenes any provision of this Act or rules made thereunder for which no penalty has specifically been provided in this section shall be liable to pay a penalty of five thousand rupees or three percent of the amount of duty involved, whichever is higher.”;

(6) in section 38,-

(i) in sub-section (2), the word “Additional” shall be omitted; and

(ii) in sub-section (4),-

(A) for the words “forty-five”, the word “ninety” shall be substituted; and

(B) for the full stop at the end, a colon shall be substituted, and thereafter the following new proviso shall be added, namely:-

(7) for section 47B, the following shall be substituted, namely:-

“47B. Disclosure of information by a public servant.-(1) Any information acquired under any provision of this Act shall be confidential and no public servant shall disclose any such

information, except as provided under section 216 of the Income Tax Ordinance, 2001 (XLIX of 2001).

(8) in the First Schedule,-

(a) in Table I, in column (1),-

(i) against serial numbers 4, 5 and 6, in column (4), for the word “ten”, the word “eleven” shall be substituted;

(ii) for serial numbers 9 and 10 and the corresponding entries relating thereto in columns (2), (3) and (4), the following shall be substituted, namely:-

(iii) against serial number 13, in column (4), for the words “five per cent of the retail price”, the words “One rupee per kilogram” shall be substituted; and

(iv) serial number 53 and entries relating thereto in columns (2), (3) and (4) shall be omitted; and

(b) after Table II, the following note shall be added, namely:-

“Note.-The duty on the services as specified against serial numbers 1, 2, 2A, 5, 8, 11 and 13 shall not be levied on services provided in a Province where the provincial sales tax has been levied thereon.”;

(9) in the Second Schedule, in column (1), serial number 3 and entries relating thereto in columns (2) and (3) shall be omitted;

(10) in the Third Schedule, in Table-1, in column (1),-

(a) serial number 18 and the entries relating thereto in columns (2) and (3) shall be omitted; and

(b) after the omitted serial number 18, the following new serial number and corresponding entries relating thereto shall be added, namely:-

(11) in the Third Schedule, in Table-II, in column (1), after serial number 12, and the entries relating thereto in columns (2) and (3), the following new serial number and entries relating thereto shall be added, namely:-

7D. Tax on developers

(1) Subject to this Ordinance, a tax shall be imposed on the profits and gains of a person deriving income from the business of development and sale of residential, commercial or other plots at the rates specified in Division VIIIB of Part I of the First Schedule.

(2) The tax imposed under sub-section (1) shall be computed by applying the relevant rate of tax to the area of the residential, commercial or other plots for sale.

(3) The Board may prescribe:

(a) the mode and manner for payment and collection of tax under this section;

(b) the authorities granting approval for computation and payment plan of tax; and

(c) responsibilities and powers of the authorities approving, suspending and cancelling no objection certificate to sell and the matters connected and ancillary thereto.

(4) This section shall apply to projects undertaken for development and sale of residential, commercial or other plots initiated and approved after the 1st July, 2016.”

(3) in section 8, in sub-section (1),-

(a) for the expression “and 7B” the expression “, 7B, 7C and 7D” shall be substituted; and

(b) in clause (d), for the word “or” a comma shall be substituted and after the figure “7B” the figures and words “, 7C and 7D” shall be inserted;

(4) in section 15, after sub-section (5), the following new sub-sections shall be added, namely:-

“(6) Income under this section derived by an individual or an association of persons shall be liable to tax at the rate specified in Division VIA of Part I of the First Schedule.

(7) The provisions of sub-section (1), shall not apply in respect of an individual or association of persons who derive income chargeable to tax under this section not exceeding two hundred thousand rupees in a tax year and does not derive taxable income under any other head.“;

(5) in section 15A, in sub-section (1), for the word “person”, wherever occurring, the word “company” shall be substituted;

(6) in section 21,-

(a) for clause (c), the following shall be substituted, namely:-

“(c) any expenditure from which the person is required to deduct or collect tax under Part V of Chapter X or Chapter XII, unless the person has paid or deducted and paid the tax as required by Division IV of Part V of Chapter X:

Provided that disallowance in respect of purchases of raw materials and finished goods under this clause shall not exceed twenty per cent of purchases of raw materials and finished goods:

Provided further that recovery of any amount of tax under sections 161 or 162 shall be considered as tax paid.“;

(b) in clause (m), the word “and” at the end shall be omitted;

(c) in clause (n), for full stop at the end a semicolon and the word: “and” shall be substituted and thereafter the following new clause shall be added, namely:-

“(o) any expenditure in respect of sales promotion, advertisement and publicity in excess of five per cent of turnover incurred by pharmaceutical manufacturers.”;

(7) in section 22, after sub-section (5), the following explanation shall be added, namely:-

“Explanation.-For the removal of doubt, it is clarified that where any building, furniture, plant or machinery is used for the purposes of business during any tax year for which the income from such business is exempt, depreciation admissible under sub-section (1) shall be treated to have been allowed in respect of the said tax year and after expiration of the exemption period, written down value of such assets shall be determined after reducing total depreciation deductions (including any initial allowance under section 23) in accordance with clauses (a) and (b) of this sub-section.”;

(8) in section 37A, in sub-section (3A), after clause (b), the following explanation thereto shall be added, namely:-

“Explanation: For removal of doubt it is clarified that derivative products include future commodity contracts entered into by the members of Pakistan Mercantile Exchange whether or not settled by physical delivery.”;

(9) in section 53, in sub-section (2),-

(a) for the word “and”, occurring for the first time, a comma shall be substituted;

(b) after the word “agreements” the words and comma “or granting an exemption from any tax imposed under this Ordinance including a reduction in the rate of tax imposed under this Ordinance or a reduction in tax liability under this Ordinance or an exemption from the operation of any provision of this Ordinance to any international financial institution or foreign Government owned financial institution operating under an agreement, memorandum of under-standing or any other arrangement with the Government of Pakistan” shall be inserted;

(10) in section 59B,-

(a) in sub-section (1), after the word “loss”, occurring for the first time, the words, bracket and figure “as computed in sub-section (1A)” shall be inserted; and

(b) after sub-section (1), amended as aforesaid, the following new sub-section shall be inserted, namely:-

“(1A) The loss to be surrendered under sub-section (1) shall be allowed as per following formula, namely:-

(A/100) x B

where-

A is the percentage share capital held by the holding company of its subsidiary company; and

B is the assessed loss of the subsidiary company.“;

(11) after section 62, the following new section shall be inserted, namely:-

“62A. Tax credit for investment in health insurance.-(1) A resident person being a filer other than a company shall be entitled to a tax credit for a tax year in respect of any health insurance premium or contribution paid to any insurance company registered by the Securities and Exchange Commission of Pakistan under the Insurance Ordinance, 2000 (XXXIX of 2000), provided the resident person being a filer is deriving income chargeable to tax under the head “salary” or “income from business”.

(2) The amount of a person’s tax credit allowed under sub-section (1) for a tax year shall be computed according to the following formula, namely:-

(A/B) x C

where-

A is the amount of tax assessed to the person for the tax year before allowance of tax credit under this section;

B is the person’s taxable income for the tax year; and

C is the lesser of-

(a) the total contribution or premium paid by the person referred to in sub-section (1) in the year;

(b) five per cent of the person’s taxable income for the year; and

(12) in section 63, in sub-section (2), in component C, in clause (ii), in the second proviso, for full stop at the end, a colon shall be substituted and thereafter the following new proviso shall be added, namely:-

“Provided also that the additional contribution of two percent per annum for each year of age exceeding forty years shall be allowed upto the 30th June, 2019 subject to the condition that the total contribution allowed to such person shall not exceed thirty percent of the total taxable income of the preceding year.”;

(13) in section 64A, in sub-section (2), for the word “one” the word “two” shall be substituted;

(14) after section 64A, the following new section shall be inserted, namely:-

“64AB. Deductible allowance for education expenses.-(1) Every individual shall be entitled to a deductible allowance in respect of tuition fee paid by the individual in a tax year provided that the taxable income of the individual is less than one million rupees.

(2) The amount of an individual’s deductible allowance allowed under sub-section (1) for a tax year shall not exceed the lesser of-

(a) five per cent of the total tuition fee paid by the individual referred to in sub-section (1) in the year;

(b) twenty-five per cent of the person’s taxable income for the year; and

(3) Any allowance or part of an allowance under this section for a tax year that is not able to be deducted for the year shall not be carried forward to a subsequent tax year.

(4) Allowance under this section shall be allowed against the tax liability of either of the parents making payment of the fee on furnishing national tax number (NTN) or name of the educational institution.

(5) Allowance under this section shall not be taken into account for computation of tax deduction under section 149.“;

(15) in section 64B,-

(a) in sub-section (1), for the figure “2018” the figure “2019” shall be substituted; and

(b) in sub-section (2), for the word “one” the word “two” shall be substituted;

(16) in section 65A, in sub-section (1), for the words “two and a half” the word “three” shall be substituted;

(17) in section 65B, in sub-section (2), for the figure “2016” the figure “2019” shall be substituted;

(18) in section 65C, after the word “enlisted” the expression “and for the following tax year” shall be added;

(19) in section 65D,-

(a) in sub-section (1), for the words “hundred per cent” the words, bracket and figure “an amount as computed in sub-section (1A)” shall be substituted;

(b) after sub-section (1), the following new sub-section shall be inserted, namely:-

“(1A) The amount of a person’s tax credit allowed under sub-section (1) for a tax year shall be computed according to the following formula, namely:-

A x (B/C)

where-

A is the amount of tax assessed to the person for the tax year before allowance of any tax credit for the tax year;

B is the equity raised through issuance of new shares for cash consideration; and

C is the total amount invested in setting up the new industrial undertaking.“;

(i) in clause (a), for the figure “2016” the figure “2019” shall be substituted; and

(ii) in clause (d), for the words “hundred per cent” the words “at least seventy per cent” shall be substituted; and

(d) in sub-section (4), after the word “that” the words “the business has been discontinued in the subsequent five years after the credit has been allowed or” shall be inserted;

(20) in section 65E,-

(a) in sub-section (1), for the words “hundred per cent” the words “at least seventy per cent” shall be substituted;

(b) in sub-section (2), for the words “hundred per cent” the words, brackets and figure “an amount as computed in sub-section (3A)” shall be substituted;

(c) in sub-section (3), for the words “this section” the words, brackets and figure “sub-section (3A)” shall be substituted;

(d) after sub-section (3), the following new sub-section shall be inserted, namely:-

“(3A) The amount of a person’s tax credit allowed under sub-section (1) for a tax year shall be computed according to the following formula, namely:-

A x (B/C)

where-

A is the amount of tax assessed to the person for the tax year before allowance of any tax credit for the tax year;

B is the equity raised through issuance of new shares for cash consideration; and

C is the total amount invested in the purchase and installation of plant and machinery for the industrial undertaking.“;

(e) in sub-section (4), for the figure “2016” the figure “2019” shall be substituted; and

(f) in sub-section (6), after the word “that” the words “the business has been discontinued in the subsequent five years after the credit has been allowed or” shall be inserted;

(21) in section 67,-

(a) in sub-section (1), after the word “expenditure”, wherever occurring, the words and comma “expenditures, deductions and allowances” shall be substituted; and

(b) in sub-section (2), after the word “deductions” the words “expenditures and allowances” shall be inserted;

(22) in section 68,-

(a) in sub-section (3), after the word “price”, occurring for the first time, the words “other than the price of immovable property” shall be inserted;

(b) after sub-section (3), the following new sub-section shall be added, namely:-

“(4) Notwithstanding anything contained in sub-sections (1) and (3), the fair market value of immovable property shall be determined on the basis of valuation made by a panel of approved valuers of the State Bank of Pakistan.”;

(23) in section 107,-

(a) for sub-section (1), the following shall be substituted, namely:-

“(1) The Federal Government may enter into a tax treaty, a tax information exchange agreement, a multilateral convention, an inter-governmental agreement or similar agreement or mechanism for the avoidance of double taxation or for the exchange of information for the prevention of fiscal evasion or avoidance of taxes including automatic exchange of information with

respect to taxes on income imposed under this Ordinance or any other law for the time being in force and under the corresponding laws in force in that country and may, by notification in the official Gazette, make such provisions as may be necessary for implementing the said instruments.“;

(b) in sub-section (IB), the words, brackets and figures “subject to sub-section (3) of section 216” shall be omitted;

(c) in sub-section (2), after the word “for”, occurring at the end, the expression “at least one of the following:” shall be inserted; and

(d) in sub-section (3), after the word “anything”, the word “contained” shall be inserted;

(24) in section 108, after sub-section (2), the following new sub-sections shall be added, namely:-

“(3) Every taxpayer who has entered into a transaction with its associate shall:

(a) maintain a master file and a local file containing documents and information as may be prescribed;

(b) keep and maintain prescribed country-by-country report, where applicable;

(c) keep and maintain any other information and document in respect of transaction with its associate as may be prescribed; and

(d) keep the files, documents, information and reports specified in clauses (a) to (c) for the period as may be prescribed.

(4) A taxpayer who has entered into a transaction with its associate shall furnish, within thirty days the documents and information to be kept and maintained under sub-section (3) if required by the Commissioner in the course of any proceedings under this Ordinance.;

(5) The Commissioner may, by an order in writing, grant the taxpayer an extension of time for furnishing the documents and information under sub-section (4), if the taxpayer applies

in writing to the Commissioner for an extension of time to furnish the said documents or information:

Provided that the Commissioner shall not grant an extension of more than forty-five days, when such information or documents were required to be furnished under sub-section (4), unless there are exceptional circumstances justifying a longer extension of time.”

(25) in section 113, in sub-section (1),-

(a) for the word “fifty”, wherever occurring, the word “ten” shall be substituted;

(b) for the figure “2009” the figure “2017” shall be substituted;

(d) the proviso shall be omitted;

(e) for the explanation, at the end, the following shall be substituted, namely:-

“Explanation.-For the purpose of this sub-section, the expression “tax payable or paid” does not include-

(a) tax already paid or payable in respect of deemed income which is assessed as final discharge of the tax liability under section 169 or under any other provision of this Ordinance; and

(b) tax payable or paid under section 4B.“;

(26) sections 113A and 113B shall be omitted;

(27) in section 114,-

(a) in sub-section (5), for the fullstop at the end a colon shall be substituted and thereafter the following new proviso shall be added, namely:-

“Provided that in case of a person who has not filed return for any of the last five completed tax years, notice under sub-section (4) may be issued in respect of one or more of the last ten completed tax years.

(b) in sub-section (6), for the third proviso, the following shall be substituted, namely:-

“Provided also that condition specified in clause (ba) shall not apply and the approval required thereunder shall be deemed to have been granted by the Commissioner, if-

(a) the Commissioner has not made an order of approval in writing, for revision of return, before the expiration of sixty days from the date when the revision of return was sought; or

(b) taxable income declared is more than or the loss declared is less than the income or loss, as the case may be, determined under section 120.“;

(28) in section 122C, in sub-section (2), for the first and second provisos, the following shall be substituted, namely:-

“Provided that the provisions of this sub-section shall not apply, if-

(a) return of income along with wealth statement, wealth reconciliation statement and other documents required under sub-section (2A) of section 116 are filed by the person being an individual or an association of persons for the relevant tax year during the said period of forty-five days; and

(b) the individual or an association of persons presents accounts and documents for conducting audit of income tax affairs for that tax year:

Provided further that the provisions of sub-section (2) shall not apply-

(a) to a company, if return of income tax alongwith audited accounts or final accounts, as the case may be, for the relevant tax year are filed by the company electronically during the said period of forty-five days; and

(b) if the company presents accounts and documents for conducting audit of its income tax affairs for that tax year.“;

(29) in section 134A,-

(a) in sub-section (2), after the word “Revenue” the words “not below the rank of Commissioner” shall be inserted; and

(b) in sub-section (4),-

(i) for the words “forty five” the word “ninety” shall be substituted; and

(ii) for the full-stop at the end a colon shall be substituted and thereafter the following proviso shall be added, namely:-

“Provided that if such order is not passed within the aforesaid period, recommendations of the committee shall be treated to be an order passed by the Board under this sub-section.”;

(30) in section 140, in sub-section (1), for the full stop at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely:-

“Provided that the Commissioner shall not issue notice under this sub-section for recovery of any tax due from a taxpayer if the said taxpayer has filed an appeal under section 127 in respect of the order under which the tax sought to be recovered has become payable and the appeal has not been decided by the Commissioner (Appeals), subject to the condition that twenty-five per cent of the said amount of tax due has been paid by the taxpayer.”;

(31) in section 147,-

(a) in sub-section (4), in component B, for semicolon a full stop shall be substituted and thereafter the following explanation shall be added, namely:-

“Explanation.- For removal of doubt it is clarified that tax assessed includes tax under sections 113 and 113C.”;

(b) in sub-section (4AA), for the expression “section 113” the expression “sections 113 and 113C” shall be substituted; and

(c) in sub-section (6A), in clause (a), for the expression “section 113” the expression “sections 113 and 113C” shall be substituted;

(32) after section 147, the following new section shall be inserted, namely:-

“147A. Advance tax from provincial sales tax registered person.-(1) Every provincial sales tax registered person shall be liable to pay adjustable advance tax at the rate of three per cent of the turnover declared before the provincial revenue authority.

(2) The advance tax under sub-section (1) shall be paid monthly at the time when sales tax return is to be filed with the provincial revenue authority.

(3) Advance tax paid under this section may be taken into account while working out advance tax payable under section 147.

(4) The provisions of this Ordinance shall apply to any advance tax due under this section as if the amount due were tax due under an assessment order.

(5) A taxpayer who has paid advance tax under this section for a tax year shall be allowed a tax credit for that tax in computing the tax due by the taxpayer on the taxable income of the taxpayer for that year.

(6) A tax credit allowed for advance tax paid under this section shall be applied in accordance with sub-section (3) of section 4.

(7) A tax credit or part of a tax credit allowed under this section for a tax year that is not able to be credited under sub-section (3) of section 4 for the year shall be refunded to the taxpayer in accordance with section 170.

(8) This section shall not apply to a person who was filer on the thirtieth day of June of the previous tax year.

(33) in section 152, in sub-section (2A), in clause (i), after the word “goods” the words and figures “except where the sale is made by the importer of the goods and tax under section 148 in respect of such goods has been paid and the goods are sold in the same condition as they were when imported” shall be added;

(34) after section 152, the following new section shall be inserted, namely:-

“152A. Payment for foreign produced commercials.-(1) Every person responsible for making payment directly or through an agent or intermediary to a non resident person for foreign produced commercial for advertisement on any television channel or any other media shall deduct tax at the rate of twenty percent from the gross amount paid.

(2) The tax deductable under sub-section (1), shall be final tax on the income of non-resident person arising out of such payment.“;

(35) in section 153,

(a) in sub-section (3),-

(i) in clauses (b) and (c), the word “and” at the end shall be omitted;

(ii) in clause (d) for full stop at the end a semicolon and the word “;and” shall be substituted and thereafter the following new clause shall be added, namely:-

“(e) tax deducted under clause (b) of sub-section (1) by person making payments to electronic and print media for advertising services shall be final tax with effect from the 1st July, 2016.”; and

(b) in sub-section (5), clause (e) shall be omitted;

(36) in section 169, after sub-section (3), the following new sub-section shall be added, namely:-

“(4) Where the tax collected or deducted is final tax under any provision of the Ordinance and separate rates for filer and non-filer have been prescribed for the said tax, the final tax shall be the tax rate for filer and the excess tax deducted or collected on account of higher rate of non-filer shall be adjustable in the return filed for the relevant tax year.”;

(37) in section 165B, in sub-section (2), for the words and figures “Subject to section 216, all” the word “All” shall be substituted;

(38) in section 170, in sub-section (2), in clause (c), for the word “two” the word “three” shall be substituted;

(39) in section 182, in the table, in column (1), against S.No.1A,-

(a) in the second column after the comma, word and figure “,or 165A” the comma word and figures “,165A or 165B” shall be inserted;

(b) in the fourth column, after the word and figure “and 165A” the comma, word and figure “,165A and 165B” shall be added;

(40) in section 198, after the word “of “, occurring for the first time, the words and figures “sub-section 1B of section 107 or” shall be inserted;

(41) in section 231A, after sub-section (1), the following explanation shall be added, namely:-

“Explanation.-For removal of doubt, it is clarified that the said fifty thousand rupees shall be aggregate withdrawals from all the bank accounts in a single day.”;

(42) in section 231B,-

(a) in sub-section (1), for full stop at the end a colon shall be substituted and thereafter the following new proviso shall be added, namely:-

“Provided that no collection of advance tax under this sub-section shall be made after five years from the date of first registration as specified in clauses (a), (b) and (c) of sub-section (6).”; and

(b) after sub-section (1), the following new sub-section shall be added, namely:-

“(1A) Every leasing company or a scheduled bank or an investment bank or a development finance institution or a modaraba shall, at the time of leasing of a motor vehicle to a non-filer, collect advance tax at the rate of three per cent of the value of the motor vehicle.”;

(43) in section 236A, in sub-section (2), after full stop at the end, the following new sub-section shall be added, namely:-

“(3) Notwithstanding the provisions of sub-section (2), tax collected on a lease of the right to collect tolls shall be final tax.”;

(44) in section 236C, after sub-section (2), the following new sub-section shall be added, namely:

“(3) Advance tax under sub-section (1) shall not be collected if the immovable property is held for a period exceeding five years.”;

(45) section 236E shall be omitted;

(46) in section 236O, for the words “in the case of withdrawals made by” the words “or deducted from” shall be substituted;

(47) in section 236P, after sub-section (3), the following explanation shall be added, namely:-

“Explanation.-For removal of doubt, it is clarified that the said fifty thousand rupees shall be aggregate transfers from all the bank accounts in a single day.”;

(48) section 236T shall be omitted and thereafter the following new sections shall be inserted, namely:-

“236U. Advance tax on insurance premium.-(1) Every insurance company shall collect advance tax at the time of collection of insurance premium from non-filers in respect of general insurance premium and life insurance premium, at the rates specified in Division XXV of Part IV of the First Schedule.

(2) Insurance premium collected through agents of the insurance company shall be treated to have been collected by the insurance company.

(3) Advance tax collected under this section shall be adjustable.

8. Amendment of the Members of Parliament (Salaries and Allowances) Act, 1974 (XXVII of 1974)

In the Members of Parliament (Salaries and Allowances) Act, 1974 (XXVII of 1974), after section 14B, the following new section shall be inserted, namely:-

“14C. Increase in salaries etc.-(1) The Federal Government may, by notification in the official Gazette, revise the salaries and allowances of members to enable them to perform their functions and discharge their responsibilities in a befitting and effective manner.

(2) The provisions of this section shall have effect notwithstanding anything contained in any other provision of this Act.

Explanation.-For the purposes of this section, the expression “Members” include the Chairman of the Standing Committees of a House.“;

9. Amendment of the Federal Ministers and Ministers of State (Salaries, Allowances and Privileges) Act, 1975 (LXII of 1975)

In the Federal Ministers and Ministers of State (Salaries, Allowances and Privileges) Act, 1975 (LXII of 1975), after section 22A, the following new section shall be inserted, namely:-

“22B. Increase in salaries etc.-(1) The Federal Government may, by notification in the official Gazette, revise the salary, allowances

and privileges of Ministers to enable them to perform their functions and discharge their responsibilities in a befitting and effective manner.

(2) The provisions of this section shall have effect notwithstanding anything contained in any other provision of this Act.“;

10. Amendment of the Chairman and Speaker (Salaries, Allowances and Privileges) Act, 1975 (LXXXII of 1975)

In the Chairman and Speaker (Salaries, Allowances and Privileges) Act, 1975 (LXXXII of 1975), after section 19A, the following new section shall be inserted, namely:-

“19AA. Increase in salaries etc.-(1) The Federal Government may, by notification in the official Gazette, revise the salary, allowances and privileges of Speaker and Chairman to enable them to perform their functions and discharge their responsibilities in a befitting and effective manner.

(2) The provisions of this section shall have effect notwithstanding anything contained in any other provision of this Act.“;

11. Amendment of the Deputy Chairman and Deputy Speaker (Salaries, Allowances and Privileges) Act, 1975 (LXXXIII of 1975)

In the Deputy Chairman and Deputy Speaker (Salaries, Allowances and Privileges) Act, 1975 (LXXXIII of 1975), after section 19A, the following new section shall be inserted, namely:-

“19B. Increase in salaries etc.-(1) The Federal Government may, by notification in the official Gazette, revise the salary, allowances and privileges of Deputy Speaker and Deputy Chairman to enable them to perform their functions and discharge their responsibilities in a befitting and effective manner.

(2) The provisions of this section shall have effect notwithstanding anything contained in any other provision of this Act.“;

THE FIRST SCHEDULE [see section 2(4)]

In the Customs Act, 1969 (IV of 1969), in the First Schedule, for the corresponding entries against “PCT Code”, “Description” and “CD%” specified in columns (1), (2), (3) and (4) appearing in chapter 1 to 99, the following corresponding entries relating to “PCT Code”, “Description” and “CD%” specified below shall be substituted, namely:-

Goods imported by privileged personnel or by organizations or by any person authorized by the contracting parties, under grant-in-aid agreements (including those agreements which cover off budget foreign contributions or funds brought by registered INGO’s without any financial liabilities to the Government of Pakistan) signed by the Economic Affairs Division (EAD) and or by any Ministry authorized by the Government of Pakistan and duly concurred by the Federal Board of Revenue (FBR)

Household articles and personal effects including vehicles and goods for donation to projects established in Pakistan, imported by the rulers and following dignitaries of UAE, Qatar and Bahrain subject to the conditions mentioned below and the conditions mentioned in sub-chapter notes:-

Dignitaries of UAE

H.H.Sheikh Khalifa Bin Zayed Al-Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of UAE Armed Force.

H.E.Sheikh Suroor Bin Mohammad Al-Nahyan, Chamberlain of the Presidential Court, Abu Dhabi.

H.E.Sheikh Mohammad Bin Khalid Al-Nahyan, Member of the ruling family of Abu Dhabi.
H.E. Sheikh Nahyan Bin Mubarak Al-Nahyan, Minister for Higher Education of the UAE and Member of the ruling family of Abu Dhabi.
H.E.Sheikh Sultan Bin Hamdan Al-Nahyan, Member of the ruling family of Abu Dhabi.
H.H.General Sheikh Mohammad Bin Zayed Al-Nahyan Chief of Staff of UAE Armed Forces.
H.E.Sheikh Tahnoum Bin Mohammad Al-Nahyan, Member of the ruling family of Abu Dhabi.
H.E. Sheikh Rashid Bin Khalifa Al-Makhtoum, Member of the ruling family of Dubai.
H.H.Sheikh Sultan Bin Zayed Al-Nahyan, Deputy Prime Minister of the UAE.
H.H.Sheikh Hamdan Bin Zayed Al-Nahyan, Minister of State for Foreign Affairs, Government of the United Arab Emirates.
H.H. Sheikh Muhammad Bin Rashid Al Maktoum, Vice President, Prime Minister, Minister of Defence and Ruler of Dubai.
H.H. Sheikh Hamdan Bin Rashid Al-Maktoum, Deputy Ruler of Dubai, Minister of Finance & Industry, UAE.
H.H. Maj. Gen. Sheikh Ahmed Bin Rashid Al-Maktoum, Member of the Ruling Family of Dubai & Head of Central Military Command.

14 H.H. Maj. Gen. Sheikh Nahyan Bin Zayed, Member of the Ruling Family of Abu Dhabi and Commander of Royal Guard.

H.H.Sheikha Fatima Bint Mubarak Ali Kittbi.
H.E.Sheikh Dr. Sultan Bin Khalifa Al-Nahyan.
Maj General Sheikh Al Mur Bin Muktoum Al Maktoum.

Dignitaries of Bahrain:

H.E King Hamad Bin Isa Al-Khalifa.
Lt. Gen. Sheikh Mohamed Bin Isa Bin Salman Al-Khalifa.

Dignitaries of Qatar:

H.E. Shaikh Faisal Bin Thani Bin Jassim Al-Thani
H.E. Shaikh Ali Bin Abdullah Bin Thani Al-Thani.
H.E. Shaikh Abdullah Bin Jassim Bin Fahad Al-Thani.
H.E. Shaikh Mubarak Bin Khalifa Bin Saud Al-Thani
H.E. Shaikh Abdullah Bin Ali Bin Abdullah Al-Thani.
H.E. Shaikh Abdul Rahman Bin Nasser Bin Jassim Al-Thani
H.E.Shaikh Ali Bin Ahmed Al-Ahmed Al-Thani
H.E.Shaikh Faisal Bin Jassim Bin Faisal Al-Thani
H.E. Shaikh Falah Bin Jassim Bin Jabr Al-Thani
H.E.Sheikh Faisal Bin Nasser Bin Hamad Al-Thani
H.E.Sheikh Hamad Bin Jassim Bin Jabr Al-Thani

(i) A complete list of all vehicles showing name of the owner, details of imports and present custodian etc. shall be provided by UAE/Qatar/Bahrain Ambassador.

(ii) The list shall be updated every six months i.e. on 31st July and 31st January to show status as on 1st July & 1st January.

(iii) UAE/Qatar/Bahrain Rulers must make and disclose alternate arrangements for maintenance of their fleet by their employees and not by any Pakistani posing as their agents or authorized representatives.

(iv) UAE/Qatar/Bahrain Embassy should undertake that no Pakistani will be allowed use of their duty free vehicles and that they will abide by the true spirit in which this concession is available to the UAE/Qatar/Bahrain Rulers.

(v) In order to avail the duty concession, an exemption certificate to this effect shall be issued by the Ministry of Foreign Affairs, Government of Pakistan.

(vi) On the recommendations of Ministry of Foreign Affairs, FBR may issue exemption certificate to any dignitary, not listed above under this PCT Code.

(i) Goods received as gift or donation from a foreign government or organization by the Federal or Provincial Government or any public sector organization subject to recommendation of the Cabinet Division and concurrence by the Federal Board of Revenue.

(ii) Goods received as gift by Pakistani organizations from Church World Services or the Catholic Relief Services as are certified by the Ministry of National Health Services Regulation and Coordination (NHSRC), that these imports are made under agreements signed by the Government of Pakistan with the Church World Service and with the Catholic Relief Service.

(i) Following goods imported by Abdul Sattar Edhi Foundation and Bilques Edhi Foundation, subject to furnishing of a certificate by Maulana Abdul Sattar Edhi son of Haji Abdul Shakoor Edhi or Mr. Faisal Edhi, Vice Managing Trustee and Qubra Edhi, Trustee, Edhi Foundation at the time of import of each consignment to the effect that the goods are meant for use by Edi Foundation or, as the case may be, by Bilquis Edhi Foundation. (In the case of goods at serial No. 14,15,16. the words “Edhi Foundation” or “as the case may be , Bilquis Edhi Foundation” are inscribed at some prominent place on the body of each vehicle, aeroplane or helicopter).

Butter oil(04.05)
Rice(10.06)
Grains(10.07)
Cooking oil(Chapter 15)
Vitamins(29.36)
Hormones.(29.37)
Pencillin (29.41)
Medicaments(30.04)
Waddings, guaze, bandages and similar articles (for example, dressings, adhesive plaster, poultices) impregnated or coated with pharmaceutical substances.(30.05).
Pharmaceutical goods (30.06)
Worn clothing(63.09)
Wireless transmission apparatus (85.15)
Wireless reception apparatus (85.27)
Ambulances.(87.03)
Mobile radiological units(87.05)
Helicopters, aeroplanes (88.02)
Parts of helicopters and aeroplanes (Respective headings)
Instruments and appliances used in medical or surgical sciences (90.18)
Orthopaedic appliances, including crutches, surgical belts and trusses; splints and other fracture appliances, artificial parts of the body, hearing aids and other appliances which are worn or carried, or implanted in the body, to compensate for a defect or disability(90.21).
Apparatus based on the use of X-rays for medical or surgical uses, control panels and desks, screens, examination or treatment tables, chairs and the like(90.22).

(ii) The ambulances already imported or to be imported under S.No. 14 of Para (i) above may be disposed of after expiry of seven years from the date of importation without payment of duty and taxes leviable at the time of import with the prior approval of FBR.

(1) Machinery, equipment, apparatus, appliances, instruments and spares thereof classifiable under Chapter 84, 85 or 90, excluding such items as are notified through a Customs General Order issued by the Federal Board of Revenue from time to time;

(2) Wheelchairs, medical, surgical, dental furniture and spares thereof;

(3) Re-agents, disposables; imported by,-

(i) charitable non profit making institutions operating hospitals of fifty beds or more; or

(ii) hospitals run by the Federal or a Provincial Government; or

(iii) the Federal or a Provincial Government exclusively meant for hospitals run by the Federal or a Provincial Government:-

Subject to the following conditions:-

(a) the importing institution operating a hospital of fifty beds or more shall furnish a proof thereof to the satisfaction of respective Collector of Customs

(b) the head of the importing institution or hospital shall furnish an undertaking in writing to the respective Collector of Customs to the effect that imported goods are bona fide requirement of the project or for in house use and these shall not be sold, utilized or disposed of otherwise than for the purpose for which the same have been imported and binds itself to pay the leviable duty and taxes in the event of breach of the undertaking.

(i) in case of Federal Government hospitals or institutions or charitable non-profit making institutions by the Ministry of National Health Services Regulations and Coordination (NHSRC).

(ii) in case of Provincial Government hospitals or instituions or charitable non-profit making instituions by the Secretary of the Health Department of the province where such hospital or institution is situated.

(iii) in case of the Federal Government or a Provincial Government by the Ministry of National Health Services Regulations and Coordination (NHSRC) or Secretary of the Health Department of the Province where such hospital is situated, respectively.

(d) In case of private sector institutions or hospitals, accountal of the goods shall be ensured by the Board of Trustees/ Governors and proof thereof shall be furnished to the satisfaction of respective Collector of Customs on demand.

(iv) Exemption under this PCT code will also be available to the hospitals being set up or constructed subject to the above conditions.

(1) Goods imported into and exported (except to tariff area of Pakistan) from the Export Processing Zones established under the Export Processing Zone Authority Ordinance, 1980 (IV of 1980) and any enactment relating to Gwadar Special Economic Zone, subject to such conditions, limitations and restrictions as the Federal Board of Revenue may impose from time to time.

(2) Plant and machinery, except the items listed under Chapter 87 of the Pakistan Customs Tariff, imported for setting up of a Special Economic Zone (SEZ) by zone developers and for installation in that zone by Zone Enterprises, on one time basis as prescribed in the SEZ Act, 2012 and rules thereunder subject to such conditions, limitations and restrictions as the Federal Board of Revenue may impose from time to time.

(3) Construction, development and operations of Gwadar port and Free Zone Area:

(i) Equipments and materials (plant, machinery, equipment, appliances and accessories), imported by the Concession holder, its operating companies and contractors/sub-contractors exclusively for construction and operation of the terminals and the Free Zone Area for a period of forty (40) years;

(ii) Ship bunker oils imported by the Concession holder for the sole purposes of supplying fuels and lubricants to the ships used in the port and its terminals for a period of forty (40) years;

(iii) Vehicles imported by the concession holder and its operating companies for a period of twenty three (23) years for construction, development and operations of Gwadar Port and Free Zone Area under the regulatory mechanism. The regulatory mechanism for such vehicles, including the number and types importable, shall be devised by the Ministry of Port & Shipping and FBR (in consultation with the Provincial Government if so required) and notified by the FBR;

(iv) Imports for port-related businesses established in the Free Zone Area for a period of 23 years.

Following goods not produced or manufactured in Pakistan which are re-imported after having been exported and have not undergone any process outside Pakistan since their exportation subject to the conditions detailed below,-

Re-imported machinery, equipment, apparatus, appliances, components, sub-components and parts:

In case machinery, equipment, apparatus, appliances, components, sub-components and parts have undergone any alterations, renovations, addition or repairs prior to their re-import into Pakistan, the cost incurred on such alterations, renovations, additions or repairs (excluding the element of freight and other incidentals) shall be liable to duty as leviable under its current PCT heading corresponding to the PCT heading determined at the time of original import provided the same was exported under a contract of alteration, renovation, addition or repairs, to the original supplier or his authorized service center provided further that the make, model and other specifications, as well as the receiver, shall remain the same as were at the time of the original import.

Vehicles re-imported by owners in possession:

In case vehicles have undergone any alterations, renovations, addition or repairs prior to their re-import into Pakistan, the cost incurred on such alterations, renovations, additions or repairs (excluding the element of freight and other incidentals) shall be liable to duty as leviable under its current PCT heading corresponding to PCT heading determined at the time of original import provided the vehicle was exported under a contract of alteration, renovation, addition or repairs provided further that the make, model, engine number, chassis number and other specifications as well as the exporter of the vehicle shall remain the same. In case of bullet proofing of vehicles, conditions specified in Import Policy Order in vogue at the time of import shall be applicable.

Goods mentioned below, imported temporarily into Pakistan with a view to subsequent exportation, subject to furnishing of undertaking/bond by the importers as well as their sponsoring Ministry/ Department/ Embassy:

Excavation equipment and consumable stores imported by a foreign archaeological mission to whom a license for archaeological excavation has been granted by the Federal Government or a Provincial Government.
Scientific and educational equipment imported for Scientific, educational or cultural seminars in Pakistan on the recommendation of the concerned Ministry.
Goods imported for display at international or single country exhibition organized by foreign missions or imported by or through any Ministry of Government of Pakistan provided that the imported promotional and advertising material including technical literature, pamphlets, brochures and other give-aways of no commercial value which are distributed free of cost by the exhibitors during the course of such exhibition shall not be required to be exported.
Machinery imported by the representatives of foreign commercial firms for demonstration purposes imported by or through the Ministry of Commerce or the Ministry of Foreign Affairs.
Equipment and materials imported by foreign nationals such as journalists, press photographers, members of television teams, broadcasting units and film companies subject to endorsement on their passports. The duties shall be charged if such importer fails to prove their re-export at the time of departure.
Equipment, materials and special food stuff imported by mountaineering expeditions. In case the equipment and material is not exported the expeditions may donate such equipment and produce a certificate from the Secretary of that club to the effect that the equipment and material so imported has been donated by that expedition to that club. Special food stuff can however, be consumed by them.

Following goods donated to municipal authorities including development authorities subject to the condition that the goods shall not be sold or otherwise disposed off within a period 10 years of imports without prior approval of the FBR and payment of customs duties and taxes leviable at the time of import.

Ambulances (8702.1090, 8702.9090, 8703.2390, 8703.2400, 8703.3290, 8703.3300, 8703.9000)
Fire fighting vehicles (PCT 8705.3000)
Waste disposal trucks (PCT 8704.2200, 8704.2300)
Incinerators for disposal waste management (8417.8000)
Motorized sweepers (PCT 8479.8990)
Brake down lorries (PCT 8705.9000)
Special purpose vehicles for the maintenance of street lights and overhead cables (8705.9000)

8 Snow ploughs (PCT 8430.2000)

THE SECOND SCHEDULE [see section 2(5)]

“FIFTH SCHEDULE TO THE CUSTOMS ACT 1969(IV OF 1969) [see section 18]

PART-I

IMPORTS OF PLANT, MACHINERY, EQUIPMENT AND APPARATUS, INCLUDING CAPITAL GOODS FOR VARIOUS INDUSTRIES/SECTORS

Note.-For the purposes of this Part, the following conditions shall apply, besides the conditions as specified in column (5) of the Table below:-

(i) the imported goods as are not listed in the locally manufactured items, notified through a Customs General Order issued by the Federal Board of Revenue (FBR) from time to time or, as the case may be, certified as such by the Engineering Development Board:

Provided that the condition of “local manufacturing” shall not be applicable on import of machinery, equipment and other capital goods imported as plant for setting up of a new power unit of 25 MW and above duly certified by Ministry of Water and Power in respect of those power projects which are on IPP mode meant for supply of electricity to national grid;

(ii) except for S. Nos. 1(H), 14, 20, and 21 of the Table, the Chief Executive, or the person next in hierarchy duly authorized by the Chief Executive or Head of the importing company shall certify in the prescribed manner and format as per Annex-A that the imported items are the company’s bona fide requirement. He shall furnish all relevant information online to Pakistan Customs Computerized System against a specific user ID and password obtained under section 155D of the Customs Act, 1969 IV of 1969). In already computerized Collectorates or Customs stations where the Pakistan Customs Computerized System is not operational, the Director Reforms and Automation or any other person authorized by the Collector in this behalf shall enter the requisite information in the Pakistan Customs Computerized System on daily basis, whereas entry of the data obtained from the customs stations which have not yet been computerized shall be made on weekly basis;

(iii) in case of partial shipments of machinery and equipment for setting up a plant, the importer shall, at the time of arrival of first partial shipment, furnish complete details of the machinery, equipment and components required for the complete plant, duly supported by the contract, lay out plan and drawings; and

(iv) For “Respective Headings” entries in column (3) of the Table against which two rates of customs duty 3% and 5% have been mentioned in column (4), the rate of 3% shall be applicable only for such goods which are chargeable to 3% duty under the First Schedule to Customs Act, 1969.

Explanation.-Capital Goods mean any plant, machinery, equipment, spares and accessories, classified in Chapters 84, 85 or any other chapter of the Pakistan Customs Tariff, required for-

(a) the manufacture or production of any goods, and includes refractory bricks and materials required for setting up a furnace, catalysts, machine tools, packaging machinery and equipment, refrigeration equipment, power generating sets and equipment, instruments for testing, research and development, quality control, pollution control and the like; and

(b) use in mining, agriculture, fisheries, animal husbandry, floriculture, horticulture, livestock, cool chain, dairy and poultry industry;

TABLE

Annex-A

Header Information

CERTIFICATE BY THE CHIEF EXECUTIVE, OR THE PERSON NEXT IN HIERARCHY DULY AUTHORIZED BY THE CHIEF EXECUTIVE: It is certified that the description and quantity mentioned above commensurate with the project requirement and that the same are not manufactured locally. It is further certified that the above items shall not be used for any other purpose.

Signature ____________________

Name ____________________

C.N.I.C. No. ____________________

NOTE:- In case of clearance through Pakistan Customs Computerized System, the above information shall be furnished on line against a specific user I.D. and password obtained under section 155D of the Customs Act, 1969( IV of 1969).

EXPLANATION

Chief Executive means.-

owner of the firm, in case of sole proprietorship; or
partner of firm having major share, in case of partnership firm; or
Chief Executive Officer or the Managing Director in case of limited company or multinational organization; or
Principal Officer in case of a foreign company.

Annex-B

Header Information

CERTIFICATE BY THE AUTHORIZED OFFICER OF THE REGULATORY AUTHORITY: It is hereby certified that the imported goods are genuine and bona fide requirement of the project and the same are not manufactured locally.

Signature & Seal of the Authorized Officer ____________________ Designation ____________________

NOTE.-In case of clearance through Pakistan Customs Computerized System, the above information shall be furnished on line against a specific user I.D. and password obtained under section 155D of the Customs Act, 1969( IV of 1969).

PART-II

Import of Active Pharmaceutical Ingredients, Excepients/Chemicals, Drugs, Packing Material/ Raw Materials for Packing and Diagnostic Kits and Equipments, Components and other Goods.

The Imports under this part shall be subject to following conditions, namely.-

(i) The active pharmaceutical ingredients, Excepients /chemicals, packing material and raw material for packing shall be imported only for in-house use in the manufacture of specified pharmaceutical substances, as approved by the Drug Regulatory Agency of Pakistan.

(ii) The requirement for active pharmaceutical ingredients and Excepients/chemicals, drugs as specified in Table A, B & C, shall be determined by the Drug Regulatory Agency of Pakistan;

(iii) The requirement for packing materials/raw materials for packing, as specified in Table-D, shall be determined by Input Output Co-efficient Organization;

(iv) The designated/authorized representative person of Drug Regulatory Agency of Pakistan shall furnish all relevant information, as set out in this part, online to the Customs computerized system, accessed through the unique user identifier obtained under section 155 d of the Customs Act, 1969, along with the password thereof.

(v) For “Respective Headings” entries in column (3) of the Table against which two rates of customs duty 3% and 5% have been mentioned in Column (4), the rate of 3% shall be applicable only for such goods which are chargeable to 3% duty under the First Schedule to Customs Act 1969.

Table A

(ACTIVE PHARMACEUTICAL INGREDIENTS)

Table B

(EXCEPIENTS/CHEMICALS)

Table C (DRUGS)

Table D

(PACKING MATERIALS/RAW MATERIALS FOR PACKING/BANDAGES)

Table E

(DIAGNOSTIC KITS/EQUIPMENTS)

PART-III

RAW MATERIALS/INPUTS FOR POULTRY AND TEXTILE SECTOR; OTHER GOODS

The imports under this part shall be subject to following conditions, besides the conditions specified in the Table given below namely:-

(i) the designated/authorized person of the following Ministries, or as the case may be, companies shall furnish all relevant information as detailed in the table below on line to the Customs Computerized System, accessed through the unique users identifier obtained under section 155D of the Customs Act, 1969, along with the password thereof, namely:-

(a) Ministry of Industries, Production and Special Initiatives, in case of imported goods specified against serial numbers 22 of Table;

(b) M/s Lotte Chemical Pakistan Ltd, in case of imported goods specified against serial number 24 of Table;

(ii) the importer shall file the Goods Declaration online through Pakistan Customs Computerized System where operational, and through a normal hard copy in the Collectorates/Custom-stations, in which the Pakistan Customs Computerized System is not operational as yet.

(iii) in already computerized Collectorates and Custom-stations where the Customs Computerized System is not yet operational, the Director Reforms and Automation or any other authorized officer

shall feed the requisite information about clearance/release of goods under this notification in the Customs Computerized System on daily basis, and the data obtained from the Custom-stations, which have not yet been computerized, on weekly basis.

Table

PART- IV

Imports Of Machinery And Equipment For Textile Sector

TABLE

Explanation:-For the purpose of this Part the expression “excluding those manufactured locally” means the goods which are not included in the list of locally manufactured goods specified in General Order issued by the Federal Board of Revenue or as the case may be, certified as such by the Engineering Development Board.

PART-V

IMPORT OF AUTOMOTIVE VEHICLES (CBUS) UNDER AUTOMOTIVE DEVELOPMENT POLICY (ADP) 2016-21

TABLE

PART-VI

IMPORTS OF AVIATION RELATED GOODS i.e. AIRCRAFTS AND PARTS ETC. BY AIRLINE COMPANIES / INDUSTRY UNDER NATIONAL AVIATION POLICY 2015

Note:-For the purposes of this Part, the following conditions shall apply besides the conditions as specified in column (5) of the Table below:-

(i) the Chief Executive, or the person next in hierarchy duly authorized by the Chief Executive or Head of the importing company shall certify that the imported goods/items are the company’s bona fide requirement. He shall furnish all relevant information online to Pakistan Customs Computerized System against a specific user ID and password obtained under section 155D of the Customs Act, 1969 (IV of 1969). In already computerized Collectorates or Customs stations where the Pakistan Customs Computerized System is not operational, the Director Reforms and Automation or any other person authorized by the Collector in this behalf shall enter the requisite information in the Pakistan Customs Computerized System on daily basis, whereas entry of the data obtained from the customs stations which have not yet been computerized shall be made on weekly basis;

(ii) the exemption shall be admissible on production of certificate by the Aviation Division, Government of Pakistan to the effect that the intending importer is operating in the country or intends to operate in the county in the airline sector;

(iii) the list of imported items is duly approved by the Aviation Division, Government of Pakistan in line with Policy Framework approved by the Government of Pakistan;

(iv) the Chief Executive, or the person next in hierarchy duly authorized by the Chief Executive or Head of the importing company shall furnish an undertaking to the customs authority at the time of import that the goods imported shall be used for the purpose as defined/notified by the Aviation Division, Government of Pakistan under the Aviation Policy; and

(v) in case of deviation from the above stipulations, the Collector of Customs shall initiate proceedings for recovery of duty and taxes under the relevant laws.

TABLE

PART-VII

MISCELLANEOUS

Table-A

Table-B

ABDUL JABBAR ALI, Secretary.

PRINTED BY THE MANAGER, PRINTING CORPORATION OF PAKISTAN PRESS, ISLAMABAD. PUBLISHED BY THE DEPUTY CONTROLLER, STATIONERY AND FORMS, UNIVERSITY ROAD, KARACHI.

236V. Advance tax on extraction of minerals

(1) There shall be collected advance tax at the rate specified in Division XXVI of Part-IV of the First Schedule on the value of minerals extracted, produced, despatched and carried away from the licensed or leased areas of the mines.

(2) Advance tax under sub-section (1) shall be collected by the provincial authority collecting royalty per metric ton from the lease-holder of mines or any person extracting minerals.

(3) Advance tax collected under this section shall be adjustable.

(4) The value of the minerals for the purpose of this section shall be as specified by the Board.

(49) in the First Schedule,-

(A) in Part I,-

(i) after Division V, the following new Division shall be inserted, namely:-

“DIVISION VIA

INCOME FROM PROPERTY

The rate of tax to be paid under section 15, in the case of individual and association of persons, shall be as follows:-

(ii) for Division-VII, the following shall be substituted, namely:-

“Division VII

CAPITAL GAINS ON DISPOSAL OF SECURITIES

The rate of tax to be paid under section 37A shall be as follows:-

(iii) in Division VIII, for the Table, the following shall be substituted, namely:-

Provided that gain arising on the disposal of immovable property by a person in a tax year to a Rental REIT Scheme shall be taxed at the rate of five percent upto thirtieth day of June, 2019, irrespective of the holding period.“;

(iv) after Division-VIII, the following new Divisions shall be inserted, namely:-

“DIVISION VIIIA

TAX ON BUILDERS

The rate of tax under section 7C shall be as follows:

DIVISION VIIIB

TAX ON DEVELOPERS

The rate of tax under section 7D shall be as follows:

(B) in Part III,

(i) in Division I, in clause (c),-

(I) for the figure “17.5” the figure “20” shall be substituted; and

(II) in the first proviso, for the Table the following shall be substituted, namely:-

(ii) in Division II,-

(a) in paragraph (1), for the expression “6- of the gross amount payable” the expression “7- of the gross amount payable in case a person is a filer and 12- in case the person is a non-filer” shall be substituted; and

(b) in paragraph (6),-

(i) for sub-paragraph (ii), the following shall be substituted, namely:-

“(ii) in case a person is a filer, 7- of the gross amount payable and 12- if the person is a non-filer.”; and

(ii) sub-paragraph (iii) shall be omitted;

(iii) in Division III,-

(a) in clause (1), after sub-clause (a), the following shall be inserted, namely:-

“(ab) in the case of the supplies made by the distributors of fast moving consumer goods, 3- of the gross amount payable, if the supplier is a company and 3.5- if the supplier is other than a company.”;

(b) in clause (2), in sub-clause (ii), in paragraph (c), in sub-paragraph (i), for the figure “1-” the figure “1.5-” shall be substituted;

(iv) in Division V, in clause (a), for the Table, the following shall be substituted, namely:-

(v) in Division VI, in paragraph (1), after the word “paid” the expression “for filers and 20- of the gross amount paid for non-filers” shall be inserted;

(i) for Division II, the following shall be substituted, namely:-

“DIVISION II

BROKERAGE AND COMMISSION

(ii) for Division IIA, the following shall be substituted, namely:-

“DIVISION IIA

RATES FOR COLLECTION OF TAX BY A STOCK EXCHANGE REGISTERED IN PAKISTAN

(iii) in Division IV, in the Table, in the first column, against serial number (I), in column (3), for the figure “10” the figure “12” shall be substituted;

(iv) in Division X,-

(a) for the figure “0.5” the figure “1” shall be substituted; and

(b) for the figure “1” the figure “2” shall be substituted;

(v) Division XII shall be omitted;

(vi) in Division XIII,-

(a) in paragraph (1), in the Table, in the first column,-

(i) against category “R”, in column (3), for the figure “30,000” the figure “12,000” shall be substituted;

(ii) against category “B-1”, in column (3), for the figure “50,000” the figure “35,000” shall be substituted;

(iii) against category “B-2”, in column (3), for the figure “60,000” the figure “45,000” shall be substituted; and

(b) after paragraph (2), the following new paragraph shall be inserted, namely:-

“(3) In addition to tax collected under paragraph (2) Pakistan Electronic Media Regulatory Authority shall collect tax at the rate of fifty per cent of the permission fee or renewal fee, as the case may be, from every TV Channel on which foreign TV drama serial or a play in any language, other than English, is screened or viewed.”;

(vii) in Division XVIII, in the Table, in column (1), against S.No. 2, in column (3),-

(a) for the figure “1” the figure “2” shall be substituted; and

(b) for the figure “2” the figure “4” shall be substituted;

(viii) in Division XIX, in clause (ii), for the figure “100,000”, the figure “75,000” shall be substituted;

(ix) in Division XXI, in the proviso, after the word “Division” the words “for the period it deems appropriate” shall be inserted;

(x) Division XXII shall be omitted; and

(xi) after Division XXIV, the following new Divisions shall be added, namely:-

“DIVISION XXV

ADVANCE TAX ON INSURANCE PREMIUM

The rate of tax to be collected from non-filers under section 236U shall be as under:-

DIVISION XXVI

ADVANCE TAX ON EXTRACTION OF MINERALS

The rate of tax to be collected under section 236V shall be 5- of the value of the minerals for non-filers and 0- for filers.“;

(50) in the Second Schedule,-

(A) in Part I,-

(i) in clause (13), in sub-clause (iii), for the word “two” the word “three” shall be substituted;

(ii) in clause (66), sub-clause (xviii) shall be omitted;

(iii) in clause (98), after the word “established” the words “by Government” shall be inserted;

(iv) in clause (103A), the expression “or section 59B” shall be omitted;

(v) for clause (126A), the following shall be substituted, namely:-

“(126A) Income derived by China Overseas Ports Holding Company Limited, China Overseas Ports Holding Company Pakistan (Private) Limited, Gawadar International Terminal Limited, Gawadar Marine Services Limited and Gawadar Free Zone Company Limited from Gawadar Port operations

for a period of twenty-three years, with effect from the sixth day of February, 2007.

(126AA) Profit and gains derived by a taxpayer from businesses set up in the Gawadar Free Zone Area for a period of twenty three years with effect from the first day of July, 2016.

(126AB) Profit on debt derived by-

(a) any foreign lender; or

(b) any local bank having more than 75 per cent shareholding of the Government or the State Bank of Pakistan.

under a Financing Agreement with the China Overseas Ports Holding Company Limited, for a period of twenty three years with effect from the first day of July, 2016;

(126AC) Income derived by contractors and sub-contractors of China Overseas Ports Holding Company Limited, China Overseas Ports Holding Company Pakistan (Private) Limited, Gawadar International Terminal Limited, Gawadar Marine Services Limited and Gawadar Free Zone Company Limited from Gawadar Port operations for a period of twenty years, with effect from the first day of July, 2016.“; and

(126AD) (1) Any income derived by China Overseas Ports Holding Company Limited being dividend received from China Overseas Ports Holding Company Pakistan (Private) Limited , Gwadar International Terminal Limited Gwadar Marine Services Limited and Gwadar Free Zone Company Limited for a period of twenty-three years with effect from the first day of July, 2016.

(2) Any income derived by China Overseas Ports Holding Company Pakistan (Private) Limited being dividend received from, Gwadar International Terminal Limited Gwadar Marine Services Limited and Gwadar Free Zone Company

Limited for a period of twenty-three years with effect from the first day of July, 2016.

(vi) in clause (133),-

(a) for the figure “2016” the figure “2019” shall be substituted; and

(b) after the figure “2019”, substituted as aforesaid, for full stop at the end a colon shall be substituted and thereafter the following proviso shall be added, namely:-

“Provided that eighty per cent of the export proceeds is brought into Pakistan in foreign exchange remitted from outside Pakistan through normal banking channels.”;

(B) in Part II,-

(i) for clause (3), the following shall be substituted, namely:-

“(3) (a) The tax in respect of income from services rendered outside Pakistan and construction contracts executed outside Pakistan shall be charged at the rates as specified in sub-clause (b), provided that receipts from services and income from contracts are brought into Pakistan in foreign exchange through normal banking channel.

(b) The rates in respect of income from services rendered outside Pakistan shall be 50- of the rates as specified in clause (2) of Division III of Part III of the First Schedule and the rates in respect of contracts executed outside Pakistan shall be 50- of the rates as specified in clause (3) of Division III of Part III of the First Schedule.“;

(ii) after clause (3), substituted as aforesaid, the following new clause shall be inserted, namely:-

“(3B) The income of Pakistan Cricket Board derived from sources outside Pakistan including media rights, gate money, sponsorship fee, in-stadium rights, out-stadium rights, payments made by

International Cricket Council, Asian Cricket Council or any other Cricket Board shall be taxed at a rate of four per cent of the gross receipts from such sources:

Provided that Pakistan Cricket Board may opt to pay tax at the rate of four per cent of the gross receipts from tax year 2010 and onwards:

Provided further that this option shall be available subject to withdrawal of appeals, references and petitions on the issue of tax rate pending before any appellate forum or tax authority:

Provided further that the outstanding tax liability payable under this clause up to tax year 2015 is paid by 30th June, 2016.“;

(iii) after clause (18A), the following new clause shall be inserted, namely:-

“(18B) The rate of tax as specified in Division II of Part I of the First Schedule shall be reduced by 2- in case of a company whose shares are traded on stock exchange if:

(a) it fulfils prescribed shari’ah compliant criteria approved by State Bank of Pakistan, Securities and Exchange Commission of Pakistan and the Board;

(b) derives income from manufacturing activities only;

(d) has issued dividend for the last five consecutive tax years.“;

(i) in clause (11A), in sub-clause (xxv), for full stop at the end a semi-colon and the word “; and” shall be

substituted and thereafter the following new sub-clauses shall be added, namely:-

“(xxvi) China Overseas Ports Holding Company Limited, China Overseas Ports Holding Company Pakistan (Private) Limited, Gwadar International Terminal Limited, Gwadar Marine Services Limited and Gwadar Free Zone Company Limited for a period of twenty three years, with effect from the sixth day of February, 2007.

(xxvii) companies, qualifying for exemption under clause (126M) of Part-I of this Schedule, in respect of profits and gains derived from a transmission line project.“;

(ii) in clauses (11B) and (11C), the words “or section 59B” shall be omitted;

(iii) after clause (38A), the following new clause shall be inserted, namely:-

“(38AA) The provisions of section 150 shall not apply to China Overseas Ports Holding Company Limited, China Overseas Ports Holding Company Pakistan (Private) Limited, Gwadar International Terminal Limited, Gwadar Marine Services Limited and Gwadar Free Zone Company Limited for a period of twenty-three years.”;

(iv) in clause (57),-

(a) for the expression “sections 113 and” the word “section” shall be substituted; and

(b) for the second proviso the following shall be substituted, namely:-

“Provided further that minimum tax under section 113 shall be 0.5- upto the tax year 2019 and one per cent thereafter.”;

(v) in clause (59), sub-clause (i) shall be omitted;

(vi) in clause (72A), for the words and figure “and 2015”, the words and figure “to 2016” shall be substituted.

(vii) in clause (72B), in the proviso, for full stop at the end, a colon shall be substituted and thereafter the following new provisos shall be added, namely:

“Provided further that the quantity of raw material to be imported which is sought to be exempted from tax under section 148 shall not exceed 110 per cent of the quantity of raw material imported and consumed during the previous tax year:

Provided also that the Commissioner shall conduct audit of taxpayer’s accounts during the financial year in which the certificate is issued in respect of consumption, production and sales of the latest tax year for which return has been filed and the taxpayer shall be treated to have been selected for audit under section 214C:

Provided also if the taxpayer fails to present accounts or documents to the Commissioner or the officer authorized by the Commissioner, the Commissioner shall, by an order in writing, cancel the certificate issued and shall proceed to recover the tax not collected under section 148 for the period prior to such cancellation and all the provisions of the Ordinance shall apply accordingly.“;

(viii) clause (82) shall be omitted;

(ix) in clause (86), in paragraph (a), in sub-paragraph (iii), for the figure “2017” the figure “2019” shall be substituted;

(x) for the following clause (91)

“(91) the provisions of sections 147, 151, 152, 231A, 231AA, 236A and 236K shall not apply to “The Second Pakistan International Sukuk Company Limited”, as a payer.” the following shall be substituted, namely:-

“(95) the provisions of sections 147, 151, 152, 231A, 231AA, 236A and 236K shall not apply to “The Second Pakistan International Sukuk Company Limited”, as a payer.“;

(xi) for the following clause (92)

“(92) the provisions of sections 147, 151 and 155 shall not apply to “The Second Pakistan International Sukuk Company Limited”, as a recipient.” the following shall be substituted, namely:-

“(96) the provisions of sections 147, 151 and 155 shall not apply to “The Second Pakistan International Sukuk Company Limited”, as a recipient.“;

(xii) for the following clause (93)

“(93) the provision of section 236C shall not apply to “Pakistan International Sukuk Company Limited”; the following shall be substituted, namely:-

“(97) the provision of section 236C shall not apply to “Pakistan International Sukuk Company Limited.”;

(xiii) in clause (94),-

(a) for the figure “2016”, occurring for the first time, the figure “2017” shall be substituted;

(b) after the words and comma “development services,” the words “IT services and IT enabled services as defined in clause (133) of Part I of this Schedule” shall be inserted; and

(c) in the proviso, for the full stop at the end a colon shall be substituted and thereafter the following new proviso shall be added, namely:-

“Provided further that for tax year 2017, the company shall furnish irrevocable undertaking by November, 2016, to present its accounts to the Commissioner.”;

(xiv) after the proposed substituted clause (97), the following new clauses shall be added, namely:-

“(98) The provisions of section 148 shall not apply to import of ships and other floating crafts including tugs, survey vessels and other specialized crafts

purchased or bare-boat chartered by a Pakistani entity and flying Pakistani flag:

Provided that exemption under this clause shall be available up to the year 2020, subject to the condition that the ships and crafts are used for the purpose for which they were procured, and in case such ships and crafts are used for demolition purposes, tax collectible under section 148, applicable to ships and crafts purchased for demolition purposes, shall be chargeable.

(99) The provisions of section 148 shall not apply to import or acquisition of aircraft on wet or dry lease by M/s Pakistan International Airlines Corporation with effect from 19th March, 2015.“;

(51) in the Fourth Schedule, for rule 6B, the following shall be substituted, namely:-

“6B. In computing income under this Schedule, there shall be included capital gains on disposal of shares and dividend of listed companies, vouchers of Pakistan Telecommunication corporation, modaraba certificate or instruments of redeemable capital and derivative products and shall be taxed at the rates specified in Division II of Part I of First Schedule.”;

(52) in the Sixth Schedule, in Part I, in rule 3, in clause (a), for the figure “100,000” the figure “150,000” shall be substituted;

(53) in the Seventh Schedule, in rule 7C, after the figure “2015” the word and figure “and 2016” shall be inserted; and

(54) in the Eighth Schedule in rule 1,-

(a) after sub-rule (1), the following new sub-rules shall be inserted, namely:-

“(1A) Capital gains on disposal of units of open ended mutual funds and to which section 100B apply, shall be computed and determined under this Schedule and tax thereon shall be collected and deposited by NCCPL in the prescribed manner:

Provided that second and third proviso in Division VII of Part I of the First Schedule regarding capital gains arising on redemption of securities shall continue to apply.

(1B) Gain or loss arising to persons through trading of future commodity contracts on Pakistan Mercantile Exchange, subject to tax under section 37A and to which section 100B apply, shall be computed and determined under this Schedule and tax thereon shall be collected and deposited on behalf of taxpayers by NCCPL in the manner prescribed.“;

(b) in sub-rule (2), after the expression “(1)” the expression “,(1A) and (1B)” shall be inserted;

(c) in sub-rule (3), for full stop at the end a colon shall be substituted and thereafter the following proviso shall be added, namely:-

“Provided that if the said information is not furnished under this sub-rule or sub-rule (3A), NCCPL shall forward the details to the Commissioner who shall exercise powers under the Ordinance to enforce furnishing of the said information including all penalty provisions.”; and

(d) after sub-rule (3), amended as aforesaid, the following new sub-rule shall be inserted, namely:-

“(3A) The Asset Management Companies, Pakistan Mercantile Exchange and any other person shall furnish information when required by NCCPL for discharging obligations under this Schedule.”