ISLAMABAD: The Federal Board of Revenue (FBR) on Thursday issued its notification SRO 98(1) 72013, which states that all companies as defined in Income Tax Ordinance 2001 registered for sales tax, FED or income tax, shall be subjected to withholding tax at one-fifth of the applicable rate of sales tax on all purchases.

Furthermore, the FBR statement said that the persons registered as exporters are now also to be subjected to withholding tax of one-fifth of the applicable rate of sales tax on all purchases from registered persons.

Earlier, from corporate sector, only LTU registered person was required to withhold one per cent sales tax of the value of taxable supplies from persons registered outside LTU (this has now been amended) and all companies are required to withhold sales tax.

This amendment is effective from 14, February 2013.