ISLAMABAD: The National Assembly Standing Committee on Finance and Revenue, Tuesday, refused to discuss the issue of different income tax rates for commercial and industrial importers.
The main reason, according to MNA Nafeesa Shah, was that neither the Finance Secretary nor the Chairman Federal Board of Revenue (FBR) considered right to attend the meeting of the committee. Therefore, committee recommended taking up same agenda in next meeting in the presence of higher officials of Finance Ministry and FBR.
However, when contacted, a well-placed official source at FBR told this scribe here that collection of tax at import stage was final tax liability for the importer except importing of some items.
The source said that Section 148 of clause 15 titled Rationalization of Withholding Tax Rates on Imports issued by Federal Board of Revenue FBR via a circular issued in July 2008 was related to the said issue.
This section stated that under the erstwhile provisions of section 148, withholding tax rate was 5% on imports. Tax so deducted was final tax in respect of commercial importers. However, withholding tax @ 1% on raw material and capital goods imported for own use, collected from manufacturers was adjustable, subject to the provisions of the Ordinance.
The direct and indirect exporters covered under the DTRE scheme and manufacturer exporters could import goods without payment of withholding tax.
There were consistent complaints of misuse of exemption certificate and low withholding tax rate for manufacturers who reportedly sell the imported goods in open market instead of their own use putting the commercial importers in a disadvantageous position.
Moreover, As per budgetary proposals for regarding income tax rates at import stage for filers and non-filers for the fiscal year 2015/2016 released by Federal Board of Revenue (FBR), the importers are required to deposit withholding tax under Section 148 of Income Tax Ordinance, 2001 and collector of customs is responsible for collecting it and deposit on the day the tax is collected.
The rate of withholding tax for filers of income tax return of the import value increased by Custom –duty, sales tax and federal excise duty and 1.5 percent for non-filers of income tax returns of the import value increased by Custom –duty, sales tax and federal excise duty.
Industrial undertaking importing remittal steel (PCT Heading 72.04) and directly reduced iron for its own use; Persons importing potassic Persons importing Urea; Manufactures covered under importing items Gold; and Persons importing Cotton, Designated buyers of LNG on behalf of Govt of Pakistan to import LNG.
Persons Importing Pulses, Filer: 2 percent of the import value as increased by Custom-duty, sales tax and federal excise duty and non-filer: 3 percent of the import value as increased by custom-duty, sales tax and federal excise duty.
On the second agenda item, President National Bank Pakistan informed the inquiry status regarding NBP Bangladesh scam, saying that inquiry in this regard was conducted on the basis of forensic report by M/S KPMG. He added that after receiving the detailed report from KPMG. NBP had taken disciplinary proceedings against the accused at glance.
He further informed the committee that matter has been referred to National Accountability Bureau (NAB) for further necessary action on the directions of standing committee. After thread bear discussion, the committee recommended that NAB would be invited for detail briefing in this regard.
Committee recommended that legal opinion would also be obtained from Ministry of Law and Justice with regard to the legal proceedings against former presidents NBP, at that time, The Committee further recommended that report on matter would be furnished by the NBP on monthly basis. Committee also invited NAB to next meeting along with progress made on the basis of inquiry into this scam.
