ISLAMABAD: Federal Board of Revenue (FBR) on Friday issued simplified tax rules for facilitation of small and medium enterprises (SMEs).
FBR has changed the rules to facilitate Small and Medium Enterprises to enhance exports through Notification No. 1002(I)/2019 dated 06.09.2019 which has introduced amendments in original Notification 327(I)/2008 dated 28.03.2008.
This is in line with the directives of the Prime Minister of Pakistan to simplify the tax laws and to automate the business processes to bring transparency in the system.
In order to implement this vision, FBR under the leadership of Shabbar Zaidi, Chairman, has simplify this export scheme and provided new incentives for the business community.
The Small and Medium Enterprise Units working under this scheme is the largest export promotion scheme presently being used by the export sector.
Besides introducing amendments in the Export Oriented Units Scheme, the Federal Board of Revenue has also automated these processes in the computerized clearance system WeBOC. This will further reduce human interaction and create business friendly environment.
According to the details, the retention period of plant, machinery and capital goods is reduced from 10 years to 5 years.
This will help export industry to keep abreast of latest developments and trendsin the technology.
If plant, machinery and capital goods are sold or otherwise disposed of before the expiration of five, then different slabs of duty and taxes are introduced whereas after five years disposal of such plant and machinery is allowed without payment of duty and taxes.
Similarly, disposal mechanism of spares and replacement parts have been provided and now these parts are allowed to be disposed offafter three years.
To address delays in processing, tiers of administration have been reduced. Now Regulatory Authority is created and the powers have been devolved to Additional Collectorfor grant, revalidate or amend EOU licenses.
In the new scheme, if there are any problems, the businessman can approach Chief Collector of Customs for redressal of their grievances.
In order to alleviate the burden of getting the analysis card issued from Input Output Coefficient Organization (IOCO) or Engineering Development Board (EDB) against each license, now if ratio in the analysis certificate is similar to the ratio determined in the previous year, then the Regulatory Authority will issue the license without seeking recommendations from IOCO/EDB.
Moreover, the provision for issuance of the provisional analysis certificate has also been provided in the Export Oriented Unit Rules in case of delay caused by IOCO/EDB so that the processes of the Export Oriented Units may not get hurt.