Daily Times

The Federal Board of Revenue (FBR) has been urged to simplify the withholding tax regime on imported goods under the Section 148 of the Income Tax Ordinance, 2001. Overseas Investors Chamber of Commerce and Industry (OICCI) in its proposals for budget 2021-22 urged the FBR to simplify the withholding taxes on goods at the import stage. It suggested that the criteria for obtaining exemption under Section 148 of the Income Tax Ordinance, 2001 should be based on discharge of advance tax liability as per section 147 of the Income Tax Ordinance, 2001 and clause 72B of the part 1 of the second schedule should be restored. Raw materials imported at the rate of 5.5 percent withholding tax should not be subject to minimum taxation. This anomaly should be clarified by FBR at the earliest. Procedure for application of reduced rate of 2 percent on import of raw material for own use which are not covered under Part II of Twelfth Schedule is highly cumbersome and should be simplified. The Section 148 (1) of the Ordinance to amended via the following insertion: “Provided that the Commissioner shall issue exemption certificate/ certificate of non-deduction / collection of advance tax at source at import stage within fifteen days of filing of application to exempt entities upon verification: Provided further that the Commissioner shall be deemed to have issued the exemption certificate upon the expiry of fifteen days to the aforesaid company and the certificate shall be automatically processed and issued by Iris”.