The Federal Board of Revenue (FBR) has issued a legal clarification thatthe non-resident Pakistanis are not required to file income tax returnsolely for the declaration of tax deduction on profit on debt on the NayaPakistan Certificate.

According to a modified clarification issued by FBR, the Naya PakistanCertificate, a new instrument launched by the Government/ State Bank ofPakistan, qualifies as debt instrument in terms of Clause (5AA) of Part-IIof the Second Schedule of the Income Tax Ordinance, 2001.

Therefore, profit on debt on the Naya Pakistan Certificate is subject totax @ 10% which is final tax.

Moreover, such non-residents are not required to file tax return solely forthe declaration of tax deduction on profit on debt. It may be added thatthe aforesaid concessionary tax regime is applicable to non-residents only,FBR added.

The earlier clarification issued by the FBR stated that only non-residentindividuals can purchase Naya Pakistan Certificate who maintain bankaccount abroad or foreign currency account maintained in Pakistan. It isalso clarified that such individuals are not required to file returns ofincome.

Now this clarification has been modified by the FBR.