The National Board of Revenue (NBR) has lifted Advance Tax (AT) on import of parts and accessories for computers to be made locally, according to a notification.

The revenue administration removed the AT, a kind of Value Added Tax, two and half years after it granted an exemption VAT on the import of computer accessories to encourage domestic manufacturing in July 2021.

At present, 3 percent AT is applicable on raw materials and accessories for items made locally.

Following removal of the AT on import of computer parts, domestic manufacturers will not need to pay the tax, which is refundable after adjustment of the payable VAT.

A senior official of the NBR said there is no VAT for local manufacturing of computers.

As a result, they cannot readjust the AT. So, they have to wait for the refund of their capital, which remain blocked for months.

"We are lifting AT in those areas where there is no VAT at local stage. We, at the beginning of this fiscal year, have removed such AT in some areas where VAT is exempted at the production stage," the official added.

The NBR introduced the AT in July 2019 under the VAT law 2012 in order to ensure that firms maintain records of transactions. It said the tax paid at import stage is refundable after adjustment of the payable VAT.

The official said they eliminated AT on import of computer accessories in line with demands from stakeholders.