Karachi, July 31, 2024 – The Federal Board of Revenue (FBR) has announced that exporters must now pay a 2% income tax to withholding agents. This tax is divided into two parts: a 1% minimum tax and a 1% adjustable advance tax. Until June 30, 2024, exporters were only required to pay a 1% withholding tax, which was their final tax liability. However, the Finance Act, 2024 has introduced significant changes, bringing exporters into the regular tax regime. The FBR explained that the Finance Act, 2024 introduced a new provision, sub-section (6C), in Section 147 of the Income Tax Ordinance, 2001. According to this provision, withholding agents specified in Section 154 must now deduct or collect tax at the rate of 1% at the time of the realization of foreign exchange proceeds, the sale or export of goods, payments to indirect exporters, or the clearing of goods. This 1% is in addition to the tax already collected or deducted under Section 154. Thus, withholding agents will collect a total of 2% tax on export proceeds: a 1% minimum tax under Section 154 and a 1% adjustable advance tax under sub-section (6C) of Section 147, the FBR added. Officials at the FBR said that this change aims to…