KARACHI: The Federal Board of Revenue (FBR) has been suggested to expand the tax credit on employment generation in order to create opportunities of employment.
Karachi Tax Bar Association (KTBA) in its proposals for budget 2022/2023 submitted to the FBR sought extension of tax credit on employment generation under section 64B of the Income Tax Ordinance, 2001.
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The tax bar said a manufacturing entity was allowed a tax credit of 2 per cent subject to maximum tax credit of 10 per cent on employing every 50 employees registered with Employees Old-Age Benefit Institution (EOBI) and Sind Employees Social Security Institution (SESSI).
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This credit is restricted for the companies formed up to tax year 2019. The tax bar due restriction, effort to generate documented employment would go in vein.
The KTBA proposed that the tax credit for employment generation by manufacturers under section 64B of the Ordinance should be extended up to Tax Year 2025 at least.
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“It is an excellent provision for promoting employment generation along with documentation of the same,” the tax bar added.
The KTBA also proposed the tax credit on 90 per cent sales should be also extended to persons making 90 per cent of purchases from persons registered under the Sales Tax Act, 1990 as well. The tax credit should also cover entities providing services and duly registered with the provincial sales tax authorities.
It will provide the much-desired stimulus to the documentation of the economy, the KTBA added.
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