KARACHI (July 31 2010): Chairman Federal Board of Revenue (FBR) Sohail Ahmed has constituted a six members committee to examine and analyse tax related issues pertaining to the amendments brought through Finance Act 2010. During the recent meeting of Karachi Chamber of Commerce and Industry (KCCI) with chairman FBR on deliberations over of several tax related issues in the new taxes imposed in recent budget, it was decided that a committee should be formed to analyze the issues.

The Federal Board of Revenue on July 30 issued a notification for formation of the said committee. The committee comprises three members from government side including Member (DITP) Shahid Hussain Asad, as chairman of the committee, Chief (Income Tax Policy) Aftab Ahmed as member/secretary of the committee, Member (sales Tax) Abrar Ahmed as member of the committee, and also three members from KCCI including former President of the chamber Haroon Farooqi, Chairman Taxation sub-committee, Qamar Usman and Chairman GST sub-committee Muhammad Irfan Motan.

The committee will discuss taxations issues and formulate proposals for solutions of such issues for consideration and approval of chairman FBR.

According to KCCI the issue comes up under discussion includes custom duty on five zero rates sectors. The members of KCCI were of the view that there should be no customs duty on these five sectors like textiles, leather, surgical goods, etc as these are the main contributors to exports, which are at present zero rated.

It is noted that today textile industry is in crisis as the cost of yarn has been doubled; liquidity has reduced to an alarming level. And at present when the burden is added with multiple taxes, government should also reconsider the raise in tariffs of electricity and gas. In addition, shipments usually take 3-6 months that will dry up liquidity and it is like an interest free loan to the government. The chamber will also discuss issues like tax on electricity bills, advance tax on banking transactions, wealth statement in FTR cases, audit, VAT and reform GST, advance tax on purchase of air-ticket, advance tax on edible oil, regulatory duty, turnover tax on distributors, final tax regime etc.

Another issue is withholding tax (WHT) on services at the rate of 6 percent, which has been imposed on services sector as a minimum tax, it seems that the objective of this tax was to bring doctors, lawyers, engineers, consultants into tax net. Meanwhile President, Karachi Chamber of Commerce & Industry, Abdul Majid Haji Muhammad in a statement thanked the Chairman, FBR, to form committee on the issues pertaining to Finance Act 2010 having the representation of KCCI.

Copyright Business Recorder, 2010