LAHORE: President of the Lahore Chamber of Commerce & Industry Irfan Iqbal Sheikh Saturday said that the Federal Board of Revenue (FBR) should rationalization of rates of turnover tax and withholding taxes in consultation with the Chainstore Association in order to remove unnecessary burden of taxes which do not reflect tax on income.
He was speaking with a delegation of Chainstore Association of Pakistan.
He said that it was agreed in the MoU signed Between FBR and Chainstore Association of Pakistan in the start of this year that these issues will be addressed in the Federal Budget 2020-21.
President LCCI said the FBR agreed that no audit selection shall be done on the ground that past sales are lower compared to the current sales of integrated POSs and no demand shall be raised on this ground. Similarly, no adverse inference shall be drawn in relation to declared inventory, stock and working capital during previous years merely on the basis of variation in sales due to integration. Audit Policy shall also be amended to provide for simplified and system-based audit of POS-integrated retailers.
The members of the delegation of Chainstore Association said that the turnover tax for super stores has been fixed at 1.5% by the FBR which is quite high. Since the turn over tax for retailers of tier 2 is 0.5% therefore, the turnover tax for the super stores should also be fixed at 0.5%.
They said the supermarket are bound to deduct 2.5% to 4.5% withholding tax on all bills of distribution who are registered and in case they do not have NTN then withholding tax would be double i.e 5% to 9% respectively. If someone is registered and his income tax turnover tax is 0.25% then why should he get his withholding tax deducted at rate of 2.5% which is not rational. The turn over tax and withholding tax should be same i.e 0.25%.
They further said the super markets want GST 12% like apparel industry which is also being given 12% who are integrated in POS. So we also need same 12% GST rate if chainstores/supermarkets integrate with FBR.
