According to knowledgeable sources, the federal administration has suggested taxing foreign exporters profits in the budget for the fiscal year 2023–2024.
In the 2023-24 budget, the government also proposes taxing exporters who fail to convert foreign currency within the allotted time frame. These measures are intended to limit the overall income impact.
Govt. Plans About Taxing Foreign Income of Exporters
According to sources, the government would prefer giving the State Bank of Pakistan more authority to levy exporters in order to promote documentation and transparency in the economy and increase tax income from the services sector.
According to sources, the federal budget for fiscal year 2023–2024 places a priority on achieving natural tax growth while also enacting other measures, such as ending the fixed tax regime for the export sector and imposing a Minimum Tax Regime (MTR) for exporters.
Instead of the current system, which requires tax to be paid on proceeds deducted by banks, the MTR would require exporters to pay taxes on their taxable income. This change intends to support export sector paperwork.
The administration is also debating a different proposal that, if approved by the appropriate authorities, would essentially allow exporters to receive a 100% tax credit in the upcoming fiscal year.
To reach the tax revenue goal, a variety of tax recommendations are expected to be taken into account and included in the budget for Fiscal Year 2023–24.
The emphasis is on identifying the best opportunities for expanding the tax net when taking into account the initiatives outlined below.
The above-mentioned steps will be difficult to implement at the export stage given the government’s present fiscal restrictions.
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