ISLAMABAD: The government has decided to withdraw Final Tax Regime (FTR) and bring various sectors into the documented economy.
The FTR has been proposed to be abolished through Finance Bill, 2019 as part of budget 2019/2020, which was presented on Tuesday.
The Federal Board of Income tax by its inherent nature is tax charged and levied on income.
However presently persons involved in certain transactions are not required to pay tax on their actual profit.
Instead, the tax collected or deducted on these transactions is treated as final tax liability.
This regime is available persons to 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 the aforesaid persons shall now be treated as minimum tax liability except for exporters, persons winning prizes and sellers of petroleum products.”
This measure is designed as a first step for gradual phasing out of the final tax regime and transition to income based taxation for all persons.