The Federal Board of Revenue (FBR) has said that export of services has been brought under final tax regime with effect from July 01, 2021. The FBR in an explanation to Finance Act, 2021 stated that in line with the policy of the government to attract legal flow of remittances into the country and to promote export of services in all sectors of economy, a special regime at par with export of goods regime has been introduced through insertion of section 154A of the Income Tax Ordinance, 2001. The service providers would be subjected to 1 per cent withholding tax under Division IVA of Part III of First Schedule of the Ordinance on their export proceeds remitted in Pakistan through Banks and authorised dealers of foreign exchange. This would be the final tax, said the FBR. The FBR has also been empowered to include or exclude certain services from operation of this section. Moreover, the Board may prescribe rules for the purposes of this section. Meanwhile, the FBR said that withholding tax rates for industrial and commercial consumers have been revised. Withholding tax on domestic electricity consumption was collected at the flat rate of 7.5% if the monthly domestic electricity bill exceeded Rs75,000. In order to promote documentation and broadening of tax base this withholding tax has been done away with in case of persons appearing on Active Taxpayer’s List irrespective of amount of bill, and the threshold for collection of tax has been reduced from Rs75,000 to Rs25,000. The new rate of collection of tax from commercial and industrial consumers from gross amount of bills shall be: zero for up to Rs500; 10 percent of the amount if bill exceeds Rs500 but does not exceed Rs20,000; and if the bill exceeds Rs20,000, Rs1,950 plus 12% of the amount exceeding Rs20,000 for commercial consumers and Rs1,950 plus 5% of the amount exceeding Rs20,000 for industrial consumers. Taxpayer’s are entitled for exemption certificate under section 235 on discharge of their advance tax liability. However the language of law was constructed to the effect that advance tax liability for the whole tax year was required to be discharged to obtain this certificate. Now this ambiguity has been resolved by making necessary changes in sub section (3) of section 235 of the Ordinance. Now the taxpayer can obtain a certificate for a quarter by discharging their advance tax liability for the quarter.