June 26, 2022: The amended Finance Bill will incorporate some tangible measures to facilitate the exporters of IT and IT-enabled Services (ITeS).
According to a statement issued by FBR, the sector has been provided a reduced tax rate of 0.25% on their export proceeds which is a quarter of the 1% export tax rate provided to all other exporters of goods.
Meanwhile, the sector has been removed from the tax credit regime to simplify the tax filing system and to remove hassles of compliance that were earlier required to make them eligible for 100% tax credit to claim tax exemption.
The requirements of filing Withholding Tax Statements and Sales Tax returns have been liberalized for the sector and only those who are required under the law will file WHT Statements or the Sales Tax Returns.
For individuals having turnover up to Rs 100 m per year, there is no requirement to file WHT A Statement or to deduct tax.
The definition of IT and IT-enabled services as provided under the Income Tax Ordinance, 2001 has been liberalized by expanding its scope by making suitable amendments and all-inclusive, and “not limited to” definition has been provided.
IT and IT-enabled services exporters have been provided the facility of obtaining a Sales Tax refund in respect of any Sales Tax that has been paid as their input on computers, laptops, stationary other items, etc.
This facility is not available under the Provincial Sales Tax Law.
The demand of the IT Sector for reviving tax exemption for the Venture Capital Fund has been accepted and a new provision has been created for providing Income Tax Exemption to the Venture Capital Fund for three years.
Press Release
33718
