Home / Business / Corporates may switch over to digital tax payments in 40 days

Corporates may switch over to digital tax payments in 40 days

ISLAMABAD: The Federal Board of Revenue (FBR) is considering allowing the corporate taxpayers a grace period of 40 days to switch over to the digital mode of payments effective from Nov 1.

An official announcement on Monday said that in the intervening period corporate taxpayers may use the traditional banking transaction methods including cross cheques, cross-bank draft, cross pay orders, or any other crossed banking instrument showing transfer of amount from the business bank account of the taxpayer in addition to digital mode of payment as long as those are compliant with the law.

The amendments were introduced under the Tax Laws (3rd Amendment) Ordinance, 2021. The FBR has introduced significant changes to the Income Tax ordinance, 2001, with a view to documenting the economy, capturing the supply chains and broadening the tax base.

Under the new measures, the scope of payments is restricted via traditional banking channels on account of expenditures exceeding Rs250,000 to taxpayers other than companies. Consequently, it is now mandatory for companies to make payments on expenditures exceeding Rs250,000 through digital mode only.

However, expenditures on account of utility bills, freight charges, travel fair, and payment of taxes and fines would continue to be admissible either paid in cash or traditional banking instruments.

Check Also

The future of Pak-Afghan trade

Pakistan and Afghanistan are naturally agrarian countries. Fresh fruits and vegetables are reportedly the most …