ISLAMABAD: Federal Board of Revenue (FBR) has started phasing out final tax regime for an equitable taxation system.
Sources in the FBR said on Saturday that in the budget 2019/2020 final tax regime had been withdrawn for various sectors, which were enjoying this regime for the past many years.
The FBR in a report said that income tax by its inherent nature is tax charged and levied on income.
However some 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.
Previously, 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 are now 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.