The new Final Tax Regime (FTR) system, which the IT sector views as being akin to a tax credit program, has been rejected.
The FTR system’s criteria, according to the IT sector, are quite comparable to the tax credit program that the previous administration eliminated in response to business demands.
According to the sector, frequent policy changes and government policies that are anti-business-friendly are deterring investments in the IT sector.
Speaking to a blog website, former P@SHA chairman Ahmed Syed claimed that Imran Khan’s administration had proposed a tax exemption system by doing away with the tax credit program.
After initially promising to keep the same tax exemption program in place, the current administration instead implemented the FTR system.
He claimed that if the inspector had given the IT companies a clean bill of health under the tax credit program, they would have gotten a full tax credit.
IT companies will now be required to pay 0.25 percent tax under the new FTR scheme, even after receiving Inspector approval.
According to Ahmed Syed, under the FTR system, the tax exemption plan was not subject to inspection.
Corporations would have to appear in person before the FBR inspector, and if the official is not convinced, the companies would be required to pay a 1% tax.
Despite the low tax rate, the likelihood of corruption has increased due to the presence of human factors.
In the past, inspectors have harassed businesses.
FBR inspectors have on occasion refused to accept businesses like information technology firms.
The government loses billions to collect Rs. 6 to 7 million in taxes, he added, even though enterprises pay four to five different types of taxes if they are registered and brought into the tax net.
The industry claimed that the FTR system was being attempted to be justified by the FTR justification that the FBR had provided regarding the IT tax.
To read our blog on “Sindh Government reduces IT service Tax rates, Notification issued,” click here.
Originally posted at propakistani
