FBR Imposes 1.25% Turnover Tax on Subsidy Given At Utility Stores

The Federal Board of Revenue (FBR) has imposed a 1.25 percent turnover tax on the subsidies given to Utility Stores for the current financial year 2024-25, prominent sources told ProPakistani. This tax is expected to generate approximately Rs. 1 billion in revenue from the total subsidy of Rs. 60 billion provided at the state-run utility outlets. According to FBR sources, the subsidy given to Utility Stores is being treated as taxable income. They said this has caused a dispute between the FBR and the utility stores. Last fiscal year, FBR withdrew Rs. 4 billion by attaching the accounts of Utility Stores as part of the ongoing taxation issue. It bears mentioning that the taxation of subsidies has been incorporated into the Finance Bill 2024 for the current fiscal year. The idea is the federal government is looking to save some money by taxing the income of loss-making state-run entities via a turnover tax.