KARACHI: The Federal Board of Revenue (FBR) has provided the exporters with an option from tax year 2015 and onwards to opt out of the final tax regime and file their returns of income under normal tax regime.
As per provisions of Section 154 of the Income Tax Ordinance, the tax withheld on export proceeds by an exporter is final tax on their income. Through Finance Act, 2015, a new sub-section (5) has been added to Section 154 of the Income Tax Ordinance whereby the exporters have been given an option from tax year 2015 and onwards to opt out of the final tax regime and file their returns of income under normal tax regime.
However, the taxpayer shall exercise the said option every year at the time of filing of their return of income. Furthermore, the tax deducted under this section on export proceeds shall be treated as minimum tax liability of the taxpayer on export income. Income from sales, other than exports, will be taxed in the normal manner as before.
