Brokers association: Body hits out at FBR for demanding FED

Show-cause notices for excise duty annoy KSE members


Our Correspondent July 03, 2015
Show-cause notices for excise duty annoy KSE members

KARACHI: The Karachi Stock Exchange (KSE) Stockbrokers Association has lashed out at the Federal Board of Revenue (FBR) for causing ‘great anxiety’ among compliant taxpayers.

In a statement issued on Friday, the association said the FBR has been sending show-cause notices and orders to members of the KSE, asking them to pay the federal excise duty (FED).

Tax collection on services, which were originally subject to the FED, was transferred to the provincial authorities with effect from July 1, 2011, following the passage of the 18th Constitutional Amendment. The FBR had issued a notification to that effect, saying the FED stood withdrawn in order to avoid double taxation, the statement said.

Therefore, the KSE stockbrokers have been regularly paying sales tax on services to the Sindh Revenue Board (SRB) since July 1, 2011, it added. While the FBR has not collected this ‘illegal levy’ since 2011, the association said the federal authority is once again bent on recovering the FED from Karachi-based brokerages.

“This is tantamount to double taxation and in total violation of the constitution of Pakistan,” it said, adding it appeared to be a well-thought-out policy of the federal government, particularly the FBR, to target and harass the taxpayers of Sindh.

The statement said the stockbrokers have informed the SRB about the situation and the provincial tax collection authority “fully supports the KSE members’ stand”. The stockbrokers are also planning to seek legal remedy through the Sindh High Court, the statement said.

Published in The Express Tribune, July 4th, 2015.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

Our Publications

COMMENTS (1)

Umair | 5 years ago | Reply Hello Good to see someone from brokers association taking this matter into their hands. Working at one of the largest and listed brokerage house, I understand how much anxiety is caused by these showcause notices followed by their orders to make the payment. These matters should be raised at such platforms to resist such unreasonable demands. Umair
Replying to X

Comments are moderated and generally will be posted if they are on-topic and not abusive.

For more information, please see our Comments FAQ