FBR levies one percent sales tax on exporters

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KARACHI: The Federal Board of Revenue (FBR) has agreed to levy one percent sales tax on five export-oriented sectors. The tax will be on the price difference on sales at every stage in the supply chain instead of whole amount.
This was agreed at a meeting of the FBR chairman with members of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) in Islamabad on Wednesday. Shakeel Ahmed Dhingra, Zubair Tufail, Mazhar Nasir and Shaukat Ahmed represented the FPCCI.

The meeting was held to discuss the controversial statutory regulatory order (SRO) issued by the FBR to eliminate the zero-rate tax regime for export-oriented sectors and impose two percent sales tax on the supply chain.

At a meeting in Karachi on March 4, the FBR chairman had assured the business community he would reduce the sales tax. “In today’s meeting, the FBR chairman honored his commitment and issued directives for reducing the sales tax rate to one percent,” Shakeel Dhingra, vice president of FPCCI said.

In the meeting, the FPCCI committee informed the chairman that the sales tax was imposed on value added tax mode and the imposition of tax should be made accordingly on sales at every stage of the supply chain instead of on whole amount. “Realising the fact, the chairman also issued directives to ensure sales tax collection on the commission of a transaction,” Dhingra added.

FPCCI vice president said that in the SRO issued on March 1, the sales tax was levied from the spinning stage in textile sector. “To facilitate the sector, the FBR chairman agreed to impose the tax at the processing stage,” he added.

Regarding another issue of withholding sales tax at 20 percent, Dhingra said FBR and FPCCI would formulate the procedure for implementation. “It is agreed that till the procedure is finalised the notification of withholding sale tax will not be implemented,” he added.

Another round of discussion will be held on Thursday to discuss another controversial SRO regarding elimination of certain income tax exemptions and concession at import stage.


Courtesy: The News

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