KARACHI: Federal Board of Revenue (FBR) will examine transaction records of commercial importers as they are no more under Final Tax Regime (FBR), Badaruddin Ahmed Qureshi, Chief Commissioner Inland Revenue (CCIR), Regional Tax Office (RTO)-II Karachi said.
He was addressing a seminar on ‘Minimum Tax Implications After the Finance Act, 2019’ organized by Karachi Tax Bar Association (KTBA) on Thursday.
The chief commissioner said that minimum tax was introduced through Finance Act, 2019 with objectives of documentation of economy and realizing actual potential of tax revenue.
He said that previously commercial importers were liable to discharge their liability under the FTR and further they were not required to provide any record.
However, with the introduction of minimum tax the commercial importers will required to provide details of all their goods declaration filed for clearance of their consignments.
Previously, the FTR was available to persons such as commercial importers, commercial suppliers of goods, contractors, persons deriving brokerage or commission income and persons earning income from CNG stations.
The tax collected or deducted from these persons has now been made as minimum tax liability except for exporters, persons winning prizes and sellers of petroleum products.
The chief commissioner said that the taxpayers brought into the minimum tax regime would file their income tax returns and wealth statement for tax year 2020 in September this year.
Murtaza Qurban, Executive Manager, EY Ford Rhodes, highlighted the changes related to minimum tax brought through the Finance Act, 2019.
Tax required to be collected on import of goods that are sold in the same condition as they were when imported was treated as final tax.
The Finance Act, 2018 brought a substantive conceptual shift whereby such tax collection was made “minimum tax”.
The Finance Supplementary (Second Amendment) Act, 2019 restored the original position whereby tax collected at import stage from commercial importers was again treated as final discharge of tax liability.
The Finance Act, 2019, however, again introduced amendments through which tax collection at import stage is made “minimum tax” instead of “final tax”.
As a result of this change, Commercial Importers are now required to compute their financial results for comparison of tax on profits with minimum tax.
Pursuant to the above amendments, Commercial Importers are now required to file a return of income instead of a statement in terms of section 115 of the Ordinance.