Taxes in Pakistan, especially income, have been on social media for the past few weeks Tax During this time, the debate regarding the payment and exemption to the privileged class was heated Paris Olympics i Arshad Nadeem In javelin throw events, the gold medal is won by throwing the javelin the farthest.
Arshad Nadeem, who hails from Mian Chanu in South Punjab, is well-appreciated after 40 years to win a gold medal for the country.
In view of his same achievement, federal and provincial governments, governmental and non-governmental personalities and institutions and organizations start announcing cash rewards and gifts for the player who is declared as a ‘national hero’.
As soon as prizes and gifts are mentioned, the debate on taxes on traditional and social media takes a new turn and questions about payment of income tax on the amounts or goods received by Arshad Nadeem as prizes begin.
Especially, social media users give their opinions and guesses regarding how much tax the new national hero of Pakistan will have to pay, due to which many confusions start to arise.
And in such a situation, the Federal Board of Revenue (FBR), the tax collecting body in Pakistan, comes to the field and announces that no tax will be deducted from the hero who won the gold medal in Paris Olympics 2024.
Representative FBR Bakhtiar while talking to media persons officially confirms that Arshad Nadeem will not have to pay any tax on the prizes received by him.
In a statement issued by FBR two days ago, it was said that the rumors on social and electronic media about taxing the prize money received by national hero Arshad Nadeem are baseless. Arshad Nadeem has made the name of Pakistan famous in the whole world and has made the whole nation happy by winning the gold medal after 40 years.’
Income tax on prize and winnings
First, let’s see how much tax a person who wins money or receives a prize in Pakistan has to pay in total to the government treasury.
According to section 156 of the Income Tax Ordinance 2001 (as amended up to 30 June 2024) from the law relating to taxes on the income of citizens in Pakistan, 15% of the total income tax to the citizen on the amount won in lottery, prize bond or raffle etc. will have to be paid as
A senior FBR official in Islamabad told Independent Urdu that the rate of tax levied under Section 156 is 15 percent for filers but 30 percent for non-filers.
On the condition of anonymity, he said that ‘Arshad Nadeem is now a celebrity, so even if he is not a non-filer, the status of Karan can be made positive by submitting tax returns.’
In addition to income tax, prizes and winnings or assets are subject to withholding tax.
Why Arshad Nadeem will not pay tax?
Arshad Nadeem, the gold medalist for Pakistan in Paris Olympics 2024, is exempted from paying income tax for the following reasons.
Samra Tahir, an advocate on tax issues in Islamabad, said that according to the tax laws in Pakistan, no tax is levied on the money received from the prizes of players representing Pakistan abroad.
Speaking to Independent Urdu, he said that even gifts and prizes received within the country can be exempted from tax under the tax laws.
“You can call it a loophole in Pakistan’s tax laws and procedures, but it is possible. All amounts or income received in prizes and gifts can be avoided by paying tax.’
The FBR statement said that ‘There is no withholding tax on the prizes received by Arshad Nadeem. Government of Pakistan and FBR are determined to exempt Arshad Nadeem’s income from tax before filing his return. After this clarification, such baseless rumors should end.’
Representative FBR Bakhtiar has clarified in a conversation with the media representatives that the prizes received by the athlete in case of winning a medal in the Olympic Games are not taxed under the tax law of Pakistan.
Similarly, according to Section 45 of the Income Tax Ordinance, the money related to honors, medals and awards given to a citizen by the President of the State shall be exempt from all types of taxes.
Supporters and family members of Pakistani athlete Arshad Nadeem celebrate after his victory in the finals at Mian Chanu in Khanewal district on August 9, 2024 (Shahid Saeed Mirza/AFP)
Section 45 is worded as follows: ‘(1) Any allowance connected with any honor, award or medal conferred on a person by the President of Pakistan shall be exempt from tax under this Ordinance. (2) Any monetary award made by the President of Pakistan to any person shall be exempt from tax under this Ordinance.’
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A senior FBR official in Islamabad told Independent Urdu that the government can grant exemption to any citizen based on his income.
On the condition of anonymity, he said that Arshad Nadeem can be exempted from tax on the amounts received by chief ministers, government departments and organizations and private institutions.
However, he said that in doing so, a new and wrong tradition was born.
He said: ‘Other citizens who perform such feats in the future may also demand or wish for this exemption.’
He said that sometimes the awarding institution or individual may pay the tax amount separately.
What will Arshad Nadeem get?
According to conservative estimates, the hero of the javelin throw will receive the following cash and valuables as a reward, while more boons may be showered on the nation’s spit as time goes by.
1. An athlete who wins a gold medal in the Olympic Games is awarded a prize of around two and a half million Pakistani rupees (US$86,528).
Pakistan’s Arshad Nadeem throws the javelin in the men’s javelin throw final at the Paris 2024 Olympic Games on August 8, 2024 (AFP)
2. Nadeem will receive around Rs 15 crore from the government of Pakistan, including Rs 10 crore from Chief Minister Punjab Maryam Nawaz.
3. Governor Punjab Sardar Salim Haider Khan has announced a reward of Rs 20 lakh for him.
4. Karachi Mayor Murtaza Wahab has announced five crore rupees, while Sindh Governor Kamran Tesori has announced another one million rupees.
5. Pakistani singer Ali Zafar has announced 1 million rupees.
6. Cricketer Ahmed Shahzad has announced 10 lakhs for the Olympian.
7. According to a report by the Pakistani private channel Geo News, Sindh government spokesperson and mayor of Sukkur, Barrister Islam Sheikh, has announced that Arshad Nadeem will be given a golden crown upon his return.
8. Pakistan’s leading solar energy company, Beacon Energy, has decided to offer them a solar energy system.
9. The owner of Pakistani private TV channel ARY has announced to give Arshad a residential flat as a reward.
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2024-08-11 10:14:33
