FBR Allows Telcos to Modify Tax Deductions on Imports Equipment

The Federal Revenue Board (FBR), in its opinion, is entitling telecommunications firms to modify the withholding tax deducted from the import of capital equipment and plants & machines for their usage. The telecommunication industry is a commercial entity.

The FBR explained the regulations pertaining to the telecommunications industry included in the Finance Act (2021) through the FBR's income tax circular released Thursday.

(i) I Inclusion in the definition of industrial undertaking in the telecommunications industry, pursuant to section 2 (29C) of the Order. This would enable them to modify the importation of capital equipment and plant and machinery tax deducted under Section 148.

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(ii) Reducing the retention rate of telecommunications services from 8% to 3% by minimum tax regime in accordance with Section 153.

(iii) Reduction in Internet and mobile phone usage of pre-tax in accordance with Section 236 from 12.5% to 10% for taxation year 2022 and 8% on.

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