Tax imposed on IT freelancers 1% for filers and 2% for non filers

[AZ1]

Hi,
According to 65C section, IT freelancee exempt has been over and replaced by tax credit meeting 3 requirements
1) 80% remittance comes in bank
2) must file sale tax return
3) must file WHT return


Commercial remittance now will be charged 1% for tax filers and 2% for non filers.

Banking are now charging according to above rule.

 

[313ghazi]

Silly move.

1% on freelancers is nothing. Leaving it tax free encouraged growth. He could have rolled in a decent tax of 10% after the next election when the industry was much bigger.
Silly move.

1% on freelancers is nothing. Leaving it tax free encouraged growth. He could have rolled in a decent tax of 10% after the next election when the industry was much bigger.
Silly move.

1% on freelancers is nothing. Leaving it tax free encouraged growth. He could have rolled in a decent tax of 10% after the next election when the industry was much bigger.

 

[Asimzranger]

Should be 0 tax on freelancing to promote it.

 

[313ghazi]

Should be 0 tax on freelancing to promote it.

In reality though, 1% won't make you give up your business or bankrupt anyone. It's still a much better rate than any salary. Also in Pakistan can you claim back business expenses from your tax?

Although i agree the optics of 0% was much better than 1%.

 

[AZ1]

In reality though, 1% won't make you give up your business or bankrupt anyone. It's still a much better rate than any salary. Also in Pakistan can you claim back business expenses from your tax?

Although i agree the optics of 0% was much better than 1%.

Thing is 1% is nothing who earns few thousand but its huge who earns 50 lacs or crore in a year.
They are bringing dollars and convert it in rupees which itself is a loss since dollar will go higher in pakistan sooner or later.

freelancer were exempted till june 2025 and then first they encourgae to bring dollars and then next year place tax on it that will make govt liar.

 

[313ghazi]

Thing is 1% is nothing who earns few thousand but its huge who earns 50 lacs or crore in a year.
They are bringing dollars and convert it in rupees which itself is a loss since dollar will go higher in pakistan sooner or later.

freelancer were exempted till june 2025 and then first they encourgae to bring dollars and then next year place tax on it that will make govt liar.

I understand and agree that freelancing was booming partly because of the exemption in tax. They should have honoured it 2025. It looks bad for business when the govt moves their goalposts. If today they screw freelancers, tomorrow how can big companies who setup in SEZ's be sure that the govt will honour their promises to them?

On the subject of tax - eventually it has to happen to make a country run.

I live in the UK, this is how my tax breaks down;

Income up to £12,570 - 0% income tax. This is your personal tax-free allowance.
Income between £12,571 and £50,270 - 20% income tax
Income between £50,271 and £150,000 - 40% income tax
Income above £150,001 - 45% income tax

On some of my salary i'm paying 40% tax.

On top of this i'm also paying 12% towards a tax called National insurance. This covers sick pay, maternity leave, pensions, and other health related benefits the country provides.

On top of that the state has made it mandatory for all employers to enroll staff into a pension scheme. The company has to match my pension contributions upto a certain %. I have to also pay that same contribution. Curently i think i pay 6% of my salary towards a pension fund.

I pay 20% VAT on everything. I pay a local govt tax called council tax which is currently £140 a month. I pay 60% tax on diesel and petrol.

I am not saying that Pakistani people should pay the same - that would be unfair. You guys don't get the same services, you don't have the same income security, you have higher inflation, there is a lot to adjust for.

Ultimately though - taxation will be required to build and provide the services we all want for our country. The unfortunate part is, that the common man will always bear the brunt of it, whilst big business tycoons will always fill politicians pockets to find loopholes.

This is the gift of democracy, where we let men with big ego's be funded by men with big wallets to control the country all whilst pretending they serve the people.

 

[AZ1]

I understand and agree that freelancing was booming partly because of the exemption in tax. They should have honoured it 2025. It looks bad for business when the govt moves their goalposts. If today they screw freelancers, tomorrow how can big companies who setup in SEZ's be sure that the govt will honour their promises to them?

On the subject of tax - eventually it has to happen to make a country run.

I live in the UK, this is how my tax breaks down;

Income up to £12,570 - 0% income tax. This is your personal tax-free allowance.
Income between £12,571 and £50,270 - 20% income tax
Income between £50,271 and £150,000 - 40% income tax
Income above £150,001 - 45% income tax

On some of my salary i'm paying 40% tax.

On top of this i'm also paying 12% towards a tax called National insurance. This covers sick pay, maternity leave, pensions, and other health related benefits the country provides.

On top of that the state has made it mandatory for all employers to enroll staff into a pension scheme. The company has to match my pension contributions upto a certain %. I have to also pay that same contribution. Curently i think i pay 6% of my salary towards a pension fund.

I pay 20% VAT on everything. I pay a local govt tax called council tax which is currently £140 a month. I pay 60% tax on diesel and petrol.

I am not saying that Pakistani people should pay the same - that would be unfair. You guys don't get the same services, you don't have the same income security, you have higher inflation, there is a lot to adjust for.

Ultimately though - taxation will be required to build and provide the services we all want for our country. The unfortunate part is, that the common man will always bear the brunt of it, whilst big business tycoons will always fill politicians pockets to find loopholes.

This is the gift of democracy, where we let men with big ego's be funded by men with big wallets to control the country all whilst pretending they serve the people.

Its not just this tax, for those who work on fiverr or other platforms these are the loss they have to bear
1- comission cut on fiverr( in dollars)
2- money transfer fee(in dollars)
3- this 1% tax(in rupees)

Yesterday they were saying we need $ to run the country and now saying we need taxes to run the country.
Go through my theards of water leaking, they are asking 6,000 thousand to dig and fix the water lines does this happen in UK.

after paying water & sewerage taxes, other income taxes we eventually have to fix road problem by our own money.

So in short taxes we pay goes in someone else pocket and not in building the country.

 

[AZ1]

Funny thing is, in order to have tax credit 100% back from FBR (imagine a freelancer have to face fbr to bring back money from fbr lol).

there is no guide line how to file these
2) must file sale tax return
3) must file WHT return

for freelancer, so they have to pay other fees tax consultant or other to proper file it and then hope and pray fbr one day give the tax credit back to him lol.

In short, fbr told freelancers (beta ji tax tou dena hoga warna you have to go through us)

 

[313ghazi]

Its not just this tax, for those who work on fiverr or other platforms these are the loss they have to bear
1- comission cut on fiverr( in dollars)
2- money transfer fee(in dollars)
3- this 1% tax(in rupees)

Yesterday they were saying we need $ to run the country and now saying we need taxes to run the country.
Go through my theards of water leaking, they are asking 6,000 thousand to dig and fix the water lines does this happen in UK.

after paying water & sewerage taxes, other income taxes we eventually have to fix road problem by our own money.

So in short taxes we pay goes in someone else pocket and not in building the country.

I agree this is why i feel high taxation in Pakistan is cruelty. Taxation should be proportional to the services provided.

 

[RealNapster]

In reality though, 1% won't make you give up your business or bankrupt anyone. It's still a much better rate than any salary. Also in Pakistan can you claim back business expenses from your tax?

Although i agree the optics of 0% was much better than 1%.

They will give 20% cut to fiverr but wont give a single penny to its own government in form of Taxes. And than our mango man want facilities provided to citizens by countries like UK and USA.

 

[not_two]

I understand and agree that freelancing was booming partly because of the exemption in tax. They should have honoured it 2025. It looks bad for business when the govt moves their goalposts. If today they screw freelancers, tomorrow how can big companies who setup in SEZ's be sure that the govt will honour their promises to them?

On the subject of tax - eventually it has to happen to make a country run.

I live in the UK, this is how my tax breaks down;

Income up to £12,570 - 0% income tax. This is your personal tax-free allowance.
Income between £12,571 and £50,270 - 20% income tax
Income between £50,271 and £150,000 - 40% income tax
Income above £150,001 - 45% income tax

On some of my salary i'm paying 40% tax.

On top of this i'm also paying 12% towards a tax called National insurance. This covers sick pay, maternity leave, pensions, and other health related benefits the country provides.

On top of that the state has made it mandatory for all employers to enroll staff into a pension scheme. The company has to match my pension contributions upto a certain %. I have to also pay that same contribution. Curently i think i pay 6% of my salary towards a pension fund.

I pay 20% VAT on everything. I pay a local govt tax called council tax which is currently £140 a month. I pay 60% tax on diesel and petrol.

I am not saying that Pakistani people should pay the same - that would be unfair. You guys don't get the same services, you don't have the same income security, you have higher inflation, there is a lot to adjust for.

Ultimately though - taxation will be required to build and provide the services we all want for our country. The unfortunate part is, that the common man will always bear the brunt of it, whilst big business tycoons will always fill politicians pockets to find loopholes.

This is the gift of democracy, where we let men with big ego's be funded by men with big wallets to control the country all whilst pretending they serve the people.

The guy who earns 50000£ will take more salary then the guy who earns 60000 according to this tax structure..

 

[313ghazi]

The guy who earns 50000£ will take more salary then the guy who earns 60000 according to this tax structure..

No - that's not how it works.

For everyone the first 12.5K is untaxed.
Then for everyone the income between 12.5 and 50K is taxed at 20%
Then for everyone the income between 50 and 150K is taxed at 40%.
Then for everyone the income over 150K is taxed at 45%.

So only the income you earn over 50K will be taxed at 40%.

So say I earn £70,000 a year.

12.5K will be taxed at 0%.
37.5K will be taxed at 20%.
20K will be taxed at 40%.

These slabs make up a total income of 70K, but each slab is taxed differently.

 

[AZ1]

They will give 20% cut to fiverr but wont give a single penny to its own government in form of Taxes. And than our mango man want facilities provided to citizens by countries like UK and USA.

So they will give 20% cut to fiverr, then $15 charge for transfer into bank and then 1% on every earning. While sugar, medicine and other mafia and all will raise price as their own will and will have back of court as well. So yeah crackdown on small fish and let create atmosphere where big fish can swim freely as per their will and then say why pakistan is not progressing.

 

[313ghazi]

They will give 20% cut to fiverr but wont give a single penny to its own government in form of Taxes. And than our mango man want facilities provided to citizens by countries like UK and USA.

This is the whole rola. What comes first? Taxation or services? In reality it has to go hand in hand.

The health cards is a great example. The state is providing a service how, it is paying premiums, once everyone has one, and the service is established, they should have a means based system of taxation to help bear the cost of it. It will allow more services to be covered by it.

The other question is who pays though? Mango man or the likes of JKT who owns fields growing mango's that would cover a small nation? We have the same problem in Britain, but we're not a poor nation, we can afford the masti of the elite. Pakistan cannot.

So they will give 20% cut to fiverr, then $15 charge for transfer into bank and then 1% on every earning. While sugar, medicine and other mafia and all will raise price as their own will and will have back of court as well. So yeah crackdown on small fish and let create atmosphere where big fish can swim freely as per their will and then say why pakistan is not progressing.

Exactly my point. Unfortunately you can expect more of this. The small fish cannot escape the net, the big fish will pull the fisherman in and drown him in his own net.

 

[RealNapster]

So they will give 20% cut to fiverr, then $15 charge for transfer into bank and then 1% on every earning. While sugar, medicine and other mafia and all will raise price as their own will and will have back of court as well. So yeah crackdown on small fish and let create atmosphere where big fish can swim freely as per their will and then say why pakistan is not progressing.

Help me understand this
Majority freelancers hire PayPal services. Which store their month long payments and release at once. So for every gig fiverr deduct 20% and remaining is transferred to that PayPal account. I consider a freelancer successfull if he earn $1000 post deduction in a month. $15 on transfer of that whole amount still means $985. 1% on that is how much ? $9.85 ? So that freelancer is doomed because he have to pay $10 more per month ?

Let's stop taking taxes at all because we are unable to control sugar mafia. Ab aik sugar mafia Kay chakar me mulk chalana Chor Dy Kia ?