Islamabad, Pakistan: A dispute has arisen between the Federal Board of Revenue (FBR) and the Azad Jammu and Kashmir (AJ&K) tax authorities regarding the deduction/withholding of income tax and sales tax on goods, services, and contracts executed in AJ&K.
The Ministry of Finance has sought clarification from the FBR on whether the jurisdiction for tax collection lies with the FBR or the AJ&K CBR. The FBR believes that tax should be deposited with the AJ&K revenue authority, while the AJ&K tax authorities argue that they have jurisdiction over tax collection in the region.
The AJ&K Council Board of Revenue was established in 2020 and is legally competent to collect taxes from AJ&K. Organizations and businesses operating in both AJ&K and Pakistan are required to file tax returns and pay taxes in both jurisdictions. Business Recorder
The FBR is reviewing the legal issues involved and will provide necessary clarification to the Ministry of Finance and AJ&K tax authorities. The resolution of this dispute is crucial for ensuring clarity and consistency in tax collection procedures.
