News Paper: Business Recorder
ISLAMABAD (July 24 2010): The Federal Board of Revenue (FBR) has constituted a committee comprising Chief Income Tax Policy, representatives of All Pakistan Oil Tankers Contractors Association (APOCA) and All Pakistan Oil Tankers Owners Association (APOTOA) to resolve the issue of heavy documentation and double tax being charged from the service providers in the transport sector.
On the conclusion of the meeting between these associations and FBR Chairman Sohail Ahmed here on Friday, Ainullah Agha Chairman of contractors association told Business Recorder that the tax authorities have assured them to resolve the issue of avoid double taxation on the industry.
During the meeting, FBR Member Direct Tax Policy Israr Rauf was also present to discuss the issue with the relevant associations. It has been agreed that the committee would convene series of meetings in future to come up with some viable solution for documentation of these associations, which is practically possible.
Referring to the FBR Chairman, he said that the FBR wanted to expand the tax base by bringing un-registered suppliers of different items like tyres, spare parts etc into the tax net. The priority of the government is to bring the potential taxpayers into the tax net for which withholding agents can provide vital information. Being withholding tax, contracts can play an important role in providing information about their supplies. The FBR would ensure that the transporters owners/contractors should not be liable to double taxation. The technical and legal issues of the associations would be resolved, he said while referring to the FBR chairman.
The tax authorities acknowledged that the transporters and contractors have been engaged in paying 2 percent withholding tax on gross turnover, which is final discharge of tax liability. The representatives of the association raised the issue that the contractors are not legally bound to pay any other tax apart from final tax liability. The 2 percent withholding tax has been declared as 'minimum tax' on the transport services, which has restricted the contractors to maintain documentation and regularly file their income tax returns and ensure deduction of withholding tax on making payments for purchase of tyres, spare parts and other items.
The representatives of the associations also informed the tax authorities about their practical difficulties to ensure heavy documentation like book keeping, return filing etc under the Finance Act 2010. Heavy documentation for the contractors included maintaining cash books, bank books, ledgers, names and particulars of the parties dealing with the contractors and ID card copies of all persons involved in business.
Practically they can not operate as withholding agent despite the fact that they are covered under the category of individual taxpayer with annual turnover of Rs 50 million. The new tax is an addition to various federal and provincial taxes paid by them and the new tax is causing financial damage to the oil transport sector, they told the FBR officials.
Through Finance Act, in line with the provisions regarding withholding liability in case of companies and AOPs, an individual with turnover of Rs 50 million or above is also to be designated as "prescribed person" under sub-section (9) of section 153. Such individual shall be responsible to act as withholding agent.
An individual with turnover of Rs 50 million or above has been added in the list of "prescribed person" under sub-section (9) of section 153. Beside senior tax officials, Afzal Masood of the APOCA and Sadat Manzoor Butt, General Secretary of the contractors association, were also present in the meeting.
On the conclusion of the meeting between these associations and FBR Chairman Sohail Ahmed here on Friday, Ainullah Agha Chairman of contractors association told Business Recorder that the tax authorities have assured them to resolve the issue of avoid double taxation on the industry.
During the meeting, FBR Member Direct Tax Policy Israr Rauf was also present to discuss the issue with the relevant associations. It has been agreed that the committee would convene series of meetings in future to come up with some viable solution for documentation of these associations, which is practically possible.
Referring to the FBR Chairman, he said that the FBR wanted to expand the tax base by bringing un-registered suppliers of different items like tyres, spare parts etc into the tax net. The priority of the government is to bring the potential taxpayers into the tax net for which withholding agents can provide vital information. Being withholding tax, contracts can play an important role in providing information about their supplies. The FBR would ensure that the transporters owners/contractors should not be liable to double taxation. The technical and legal issues of the associations would be resolved, he said while referring to the FBR chairman.
The tax authorities acknowledged that the transporters and contractors have been engaged in paying 2 percent withholding tax on gross turnover, which is final discharge of tax liability. The representatives of the association raised the issue that the contractors are not legally bound to pay any other tax apart from final tax liability. The 2 percent withholding tax has been declared as 'minimum tax' on the transport services, which has restricted the contractors to maintain documentation and regularly file their income tax returns and ensure deduction of withholding tax on making payments for purchase of tyres, spare parts and other items.
The representatives of the associations also informed the tax authorities about their practical difficulties to ensure heavy documentation like book keeping, return filing etc under the Finance Act 2010. Heavy documentation for the contractors included maintaining cash books, bank books, ledgers, names and particulars of the parties dealing with the contractors and ID card copies of all persons involved in business.
Practically they can not operate as withholding agent despite the fact that they are covered under the category of individual taxpayer with annual turnover of Rs 50 million. The new tax is an addition to various federal and provincial taxes paid by them and the new tax is causing financial damage to the oil transport sector, they told the FBR officials.
Through Finance Act, in line with the provisions regarding withholding liability in case of companies and AOPs, an individual with turnover of Rs 50 million or above is also to be designated as "prescribed person" under sub-section (9) of section 153. Such individual shall be responsible to act as withholding agent.
An individual with turnover of Rs 50 million or above has been added in the list of "prescribed person" under sub-section (9) of section 153. Beside senior tax officials, Afzal Masood of the APOCA and Sadat Manzoor Butt, General Secretary of the contractors association, were also present in the meeting.
-www.brecorder.com
0 comments:
Post a Comment