ISLAMABAD: Federal Board of Revenue (FBR) is set to launch simplified income tax return form for small retailers, sources said on Tuesday.
“The FBR is likely to issue the return form for small return forms in pursuance to the agreement between the tax authorities and traders associations signed on October 30, 2019,” a senior tax official said.
The official said that the FBR had finalized all the formalities to facilitate the small traders as envisaged in the agreement.
The FBR has already extended the last date for filing income tax returns for tax year 2019 up to January 31, 2020.
Certain relaxation to traders have already been announced through Tax Laws (Second Amendment) Ordinance, 2019.
The term “trader” has been defined to mean an individual engaged in business of buying and selling of goods in the same state, including a retailer and a wholesaler but excluding a distributor.
According to PwC A F Ferguson Chartered Accountants the concessions provided to traders are as under:
(i)The general rate of minimum tax payable (under section 113 of the ITO 2001) has been reduced from 1.5 percent to 0.5 percent for tax year 2020 for traders having turnover up to Rs. 100 million. However, for traders who have filed income tax returns for tax year 2018, the tax liability for tax years 2019 and 2020 should not be less than the tax liability for tax year 2018, to become eligible for reduced rate of Minimum Tax of 0.5 percent.
(ii)Individual having turnover of Rs. 50 million or more in any of the preceding tax years is liable to deduct tax under section 153 while making payments against supply of goods, services and contracts.
Through the Second Amendment Ordinance, traders being individuals having turnover upto Rs. 100 million have been exempted from deducting tax under section 153 while making payment against supply of goods, services and contracts. The Board is expected to clarify the year with respect to which turnover of Rs100 million will be calculated by the trader.