Pakistan’s Finance (Supplementary) Bill 2023 has introduced new taxes to finalize the IMF deal, one of which is the advance tax of 10% on functions and gatherings. This tax was previously implemented and has now been re-introduced, effective immediately. Under section 236CB, this tax will be charged on the total amount of the bill charged to the person holding the event.
The tax will be applicable to any event held in a marriage hall, marquee, hotel, restaurant, commercial lawn, club, or a community place, among others. The bill amount can either be charged separately or in a lump sum. Additionally, if other services such as food or decoration are provided by third-party vendors, they will also be taxed at the same rate of 10%.
Functions include a wide range of events such as weddings, seminars, workshops, sessions, exhibitions, concerts, shows, parties, and other gatherings. The owner of the premises, lease holder, operator or manager of the venue where the function is held will be responsible for collecting the tax.
The implementation of this tax has generated a lot of buzz in Pakistan, with many people concerned about its impact on the overall cost of functions and gatherings. This tax is expected to generate significant revenue for the government, but it remains to be seen how it will affect the public’s willingness to hold events and attend functions.
In conclusion, the implementation of the 10% advance tax on functions and gatherings is a new development in Pakistan’s taxation system. It is important for event organizers and attendees to be aware of this tax and factor it into their budgeting decisions. The government’s decision to implement this tax is a step towards generating revenue and meeting the IMF deal requirements.