ISLAMABAD: The Federal Board of Revenue has amended the income tax ordinance for collection of advance tax from provincial sales tax registered persons.

According to amendments, every provincial sales tax registered person will be liable to pay adjustable advance tax at the rate of 3 per cent of the turnover declared before the provincial revenue authority.

The FBR estimates that the decision will bring around 15,000 provincial sales tax registered persons under the income tax regime.

Through the Finance Act 2016, the federal government has made it mandatory for the provincial revenue authorities to accept sales tax returns from provincial services providers only who deposit advance tax at the filing of returns.

The details released here on the mode of collection of the tax showed that sales tax registered persons will pay the advance tax on monthly basis at the time when sales tax return is to be filed with the provincial revenue authority.

A taxpayer, who has paid advance tax for a tax year will 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. However, a tax credit or part of a tax credit allowed for a tax year that is not able to be credited for the year will be refunded to the taxpayer.

Published in Dawn, June 24th, 2016