KARACHI – Freelancers, doctors, lawyers and IT professionals are set to face 15% withholding tax, as the FBR tightens its grip on independent earnings.
Several professionals inlcuing medical experts, legal consultants, architects, accountants and independent software engineers and developers will all fall under the new tax rate, with the 15% deduction calculated on the gross amount payable for their services.
The change is part of a broader overhaul of withholding tax rates announced by the FBR through its budget explanatory circular covering services and certain debt securities.
But 15% professional tax is not the only change. FBR has also revised rates across several other service categories, with some services seeing their withholding tax increase from 6% to 7%.
Companies operating terminals and ports will now face a 12% withholding tax on their gross receipts payable, while a 14% rate has been prescribed for other services that do not fall under specified categories.
The tax net is also tightening around debt-market transactions. Under Section 151A, the withholding tax on specified gross capital gains arising from the disposal of debt securities has jumped from 15% to 20%.
The revised measures mean independent professionals and businesses covered by the new categories will have to factor in higher upfront tax deductions when the new rates take effect.
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News Desk
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