January 6, 2020: The Tax Amendment Ordinance has made corrections in law to accommodate reasonable demands of traders, says a Press Release issued by Federal Board of Revenue.
Since CNIC disclosure of every sale is a major requirement of law now, the traders were rightfully demanding a decrease in the minimum tax rate as the majority of taxpayers were earlier paying the minimum tax on grossly suppressed sales.
In view to encouraging correct declarations, the rate of minimum tax has been rationalized. Similarly, medium-sized traders have been absolved from their liability as withholding agent to increase ease of doing business. The trade associations have committed to getting all medium and large-sized retailers registered with income tax.
The association have also nominated their representatives to evaluate turnover of the under-declaring business and have also joined hands with FBR for dispute resolution in audits. FBR considers that the future of taxation lies in collaboration with taxpayers as opposed to confrontation.
It is likely that this arrangement will achieve a win-win situation for traders and FBR in achieving goals of documentation and reasonable taxation without creating fear and distorted economic behaviour.