No tax on prize for Arshad Nadeem: FBR spokesperson

ISLAMABAD: Senior officer of Inland Revenue Service, Bakhtiar Muhammad, who is in Basic Scale 21, stated that Arshad Nadeem, who won the gold medal in javelin throw at the Paris Olympics with a world record distance of 192.97 meters, received a reward of $50,000 from the Olympic administration for setting an all-time record in the 118-year history of the Olympics.

Similarly, Punjab Chief Minister Maryam Nawaz announced a reward of Rs100 million for him. Additionally, the Mayor of Karachi, Murtaza Wahab, on behalf of the Sindh government, announced a reward of Rs50 million. Furthermore, the governors of Sindh and Punjab announced rewards of Rs1 million each. Now that Arshad Nadeem has returned to the homeland, the rewards announced by both domestic and international investors will also not be subject to any tax.

A notification has been issued appointing Bakhtiar Muhammad, a senior officer in Basic Scale 21 of the Inland Revenue Service, as the official spokesperson of the FBR.

In a special interview with Jang on the night of Saturday, the new official spokesperson of the Federal Board of Revenue, Bakhtiar Muhammad, stated that under Section 158 of the Income Tax Ordinance 2001, withholding tax is applicable on prizes won through prize bonds, raffles, lotteries, quizzes, advertisements, and crossword puzzles. However, since Arshad Nadeem has won an individual gold medal for Pakistan after 40 years, none of these five categories apply to his winnings; therefore, no withholding tax will be levied on them.

When asked about the current withholding tax rates, he stated that if the winner of a prize from the aforementioned five categories is a filer, they must pay 15 percent tax on the prize money, whereas a non-filer would have to pay 20 percent tax. However, no tax will be applied to Arshad Nadeem’s winnings because, under Section 156 of the Income Tax Ordinance 2001, none of these five categories apply to the gold medal and its associated prize money won at the Olympics. Bakhtiar Muhammad also clarified to Jang that the news circulating in the media about several crores of rupees in taxes on Arshad Nadeem’s prize money is incorrect.