Islamabad: The federal government might amend the laws related to changing tax residency for non-resident Pakistanis in the upcoming budget 2023-2024, a news source reported on May 31.
The news source mentioned that Capital Value Tax and tax deemed on income under Section 7E of the Income Tax Ordinance, 2001, is applicable to individual residents of Pakistan. Under Section 82 of the Ordinance, an individual is considered a resident in Pakistan if they are present in the country for a period of 183 days or more in a tax year or an employee of the federal or provincial government posted abroad in the tax year and being a citizen of Pakistan is not present in any other country for more than 180 days during the tax year or who is not a resident of any other country.
According to the news source, it was discovered that taxpayers are changing tax residency status by staying in another country for more than 6 months. Therefore, it is suggested to make suitable tax changes for non-resident Pakistanis to be applicable from the tax year 2023-24. The amendment states that the assets owned by such individuals will be deemed disposed of, in the year in which such person has become non-resident.
For the deemed disposal, the individual will have to pay tax on capital gains that will be calculated as the difference between the fair value of assets at year-end in which such person becomes non-resident and the original cost of such assets with the individual. This calls for tax changes for non-resident Pakistanis in Section 75- Disposal and Acquisition of Assets.
Iqra holds BS in International Relations and is passionate about writing engaging content on trending real estate topics. When not working, she is either spending time with family, shopping, or discussing shows & movies.
