IT, IT-enabled services to face 4% WHT
According to an income tax circular of the Federal Board of Revenue (FBR), the withholding tax rates on non-categorized services under section (u/s 153) applicable prior to Finance Act, 2025 were applied at the rate 9 percent and 11 percent for company and other than companies respectively.
The rate of withholding for Sports Person was 10 percent. Similarly, under section 152 and 153 of the Income Tax Ordinance categorized services were chargeable to withholding tax at the rate of 4 percent.
Pakistan's IT, ITeS sector: P@SHA underscores need for consistent tax policy
Through Finance Act, 2025 the withholding tax rate for unspecified services as well as for sports person will be charged at the flat rate of 15 percent.
However, for specified services mentioned under section 152, the withholding tax rate have been increased from 4 percent to 8 percent and the rate under section 153 is increased from 4 percent to 6 percent excluding IT and IT enabled services which will continue to be subject to withholding tax rate of 4 percent.
Copyright Business Recorder, 2025
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