FBR withdraws 1% WHT on yarn traders
Manufacturers will now have to pay 0.1% turnover tax
PHOTO: FILE
KARACHI:
The Federal Board of Revenue (FBR) has withdrawn 1% withholding tax on yarn business and manufacturers will instead pay 0.1% turnover tax.
The FBR used to confuse 0.1% turnover tax with 1% withholding tax. However, the government has now clarified that both are different taxes and yarn manufacturers would not pay 1% withholding tax, said Karachi Chamber of Commerce and Industry (KCCI) President Junaid Esmail Makda while talking to The Express Tribune.
Yarn is a basic raw material for almost every textile product as it is used in sewing, crocheting, knitting, weaving, embroidery, etc.
FBR witnesses biggest shakeup in its history
In a statement, Makda pointed out that under Section 45A of Part IV of the Income Tax Ordinance, sales, supplies and services made by traders of yarn would not be subject to deduction of withholding tax.
He praised the FBR for holding numerous meetings with the KCCI and taking into consideration the chamber’s suggestion pertaining to exemption from withholding tax. Makda said traders of yarn would pay a minimum tax of 0.1% on their annual turnover on a monthly basis on the 30th day of each month and monthly withholding tax statement would be e-filed under Section 165 of the Income Tax Ordinance, which was widely demanded by the stakeholders.
He voiced hope that misinterpretation and incorrect application of Section 113 of the Income Tax Ordinance, which was against the spirit of SRO 333 (I) 2011, would not be done again.
The FBR should continue to take more such steps as loyal taxpayers from different sectors of the economy were facing immense hardships and were finding it difficult to continue their business due to exorbitantly high cost of doing business, the KCCI president remarked.
The business cost must be brought down to provide a level playing field and make Pakistani goods competitive in the global market, he said.
FBR officials were in a quest to charge 1% to 1.5% on different pretexts. The original tax was 0.1%, he said, adding that commissioners were abusing their powers to enforce the additional tax on businessmen.
With the misinterpretation, tax officials sent notices of up to Rs40 million to yarn traders, which was sheer harassment, he added.
Published in The Express Tribune, July 23rd, 2019.
The Federal Board of Revenue (FBR) has withdrawn 1% withholding tax on yarn business and manufacturers will instead pay 0.1% turnover tax.
The FBR used to confuse 0.1% turnover tax with 1% withholding tax. However, the government has now clarified that both are different taxes and yarn manufacturers would not pay 1% withholding tax, said Karachi Chamber of Commerce and Industry (KCCI) President Junaid Esmail Makda while talking to The Express Tribune.
Yarn is a basic raw material for almost every textile product as it is used in sewing, crocheting, knitting, weaving, embroidery, etc.
FBR witnesses biggest shakeup in its history
In a statement, Makda pointed out that under Section 45A of Part IV of the Income Tax Ordinance, sales, supplies and services made by traders of yarn would not be subject to deduction of withholding tax.
He praised the FBR for holding numerous meetings with the KCCI and taking into consideration the chamber’s suggestion pertaining to exemption from withholding tax. Makda said traders of yarn would pay a minimum tax of 0.1% on their annual turnover on a monthly basis on the 30th day of each month and monthly withholding tax statement would be e-filed under Section 165 of the Income Tax Ordinance, which was widely demanded by the stakeholders.
He voiced hope that misinterpretation and incorrect application of Section 113 of the Income Tax Ordinance, which was against the spirit of SRO 333 (I) 2011, would not be done again.
The FBR should continue to take more such steps as loyal taxpayers from different sectors of the economy were facing immense hardships and were finding it difficult to continue their business due to exorbitantly high cost of doing business, the KCCI president remarked.
The business cost must be brought down to provide a level playing field and make Pakistani goods competitive in the global market, he said.
FBR officials were in a quest to charge 1% to 1.5% on different pretexts. The original tax was 0.1%, he said, adding that commissioners were abusing their powers to enforce the additional tax on businessmen.
With the misinterpretation, tax officials sent notices of up to Rs40 million to yarn traders, which was sheer harassment, he added.
Published in The Express Tribune, July 23rd, 2019.