KARACHI: Federal Board of Revenue is considering converting withholding tax regime into a minimum tax regime. This has been proposed by the commission headed by Ramzan Bhatti to eliminate all possibilities of tax refunds, sources said.
The sources added that the commission was of the view that investors across the globe desired to be saved from the front cost i.e. customs duty and sales tax on the imports of machinery and had no problem in paying income tax on the income earned through profitable ventures.
According to sources the commission’s report says that WHT except on salary becomes part of the price and is passed onto the ultimate user or consumer. Therefore, there is no justification for allowing refund on it. All other income tax exemptions should be withdrawn in the light of international studies that have successfully argued that exemptions of tax on income failed to encourage documented economy and rapid industrialisation.
Sources said that the commission had strongly recommended FBR to restrict all persons from declaring income separately from each source whether exempt or otherwise to diminish the level of black economy and reduce the gaps between the haves and the have-nots.
