The Central Board of Revenue (CBR) has rejected a proposal of manufacturers-cum-suppliers to stop the income tax department from making retrospective recovery from those who operated under Presumptive Tax Regime (PTR).
Sources told Business Recorder on Wednesday that CBR had never made any promise to the business community for amending Part-IV of Second Schedule of Income Tax Ordinance 2001.
Referring to the recent meeting between income tax department officials and business community, sources said that the private sector had demanded not to resort to retrospective recovery from those who operated under Presumptive Tax Regime (PTR) in the past.
They said that it was a cautious decision of the government to withdraw the PTR scheme with retrospective effect. The CBR is firm on this decision and is not considering any proposal to amend the income tax law or circular in this regard.
When asked why a defective scheme was introduced in the past, sources said that it was a wrong decision, which was widely misused. Some manufacturers invariably opted for PTR only when the final tax liability under PTR worked out to a smaller figure than the tax liability which would be payable if they were taxed under normal tax regime on their taxable profits.
A few days back, tax practitioners, manufacturers-cum-suppliers, chartered accountants, and representatives of corporate companies had met the tax officials and discussed practical difficulties being faced by the private sector due to withdrawal of the facility.
They demanded that transactions made up to June 30, 2005, should be declared as valid and the facility of Presumptive Tax Regime (PTR) should be considered as applicable from July 1, 2005.
On the other hand, sources said, the CBR has no intention to revise the scheme as the status of the law would remain unchanged in future.
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