KARACHI: Regional Tax Office (RTO) – II Karachi has recommended revival of minimum tax regime for commercial importers in the budget 2019/2020.
According to budget proposals sent to Federal Board of Revenue (FBR), the RTO-II Karachi recommended that Final Tax Regime for commercial importers should be withdrawn as it was creating distortion in the taxation system.
Sources said the FBR had been asked that the scope of Minimum Tax Regime (MTR) should be extended to commercial importers under Section 148 of the Income Tax Ordinance 2001 and for of goods under Section 153(I) and execution of contracts under section 153(1)(c) and Section 233 of the ordinance.
The RTO-II said that presently, the entire FTR sector, especially the commercial importers (by paying more six percent of tax), are at liberty to declare imputable income of their choice to explain assets or expenses.
This provision would bring them at par with other taxpayers, who do not enjoy this luxury, the FBR informed.
The RTO-II Karachi proposed concept of imputable income from FTR receipts: Section 169(4) which was ommitted through Finance Act 2004 may be re-incorporated in law.
This proposals should be made part of the budget in order to discourage those taxpayers who take undue benefit of provisions of law related to final tax regime and whiten those assets / incomes as well which are not from FTR recipts.