Several transporter associations have assured the Commissioner Medium Taxpayers Unit (MTU) Karachi, Asrar Rouf that they will not call a strike over withholding tax hike if the issue is resolved at a meeting with Central Board of Revenue (CBR) Chairman Abdullah Yousuf on July 21.
The assurance was given at a meeting between the transporter association representatives and tax officials at the MTU Karachi office, a MTU official told Business Recorder here on Tuesday.
From the MTU Karachi side was represented by Commissioner MTU Asrar Raouf, Additional Commissioner MTU, Mustufa Kamal and Deputy Commissioner Headquarters, Ijlal Khatak. While the Karachi Goods Carriers Association, Pakistan Oil Tanker Contractor Association and Marwat group represented the transporter associations.
The official said that the transporters associations had threatened to call strike if the WT was not reversed but after discussing their grievances in the meeting, the associations had agreed not to take any negative step.
The government has imposed a six percent withholding tax on all transport services that is non-refundable and non-adjustable. The transporter associations reacted to this because they claimed that the tariff would leave nothing for them to survive.
The official said the meeting discussed that the transporters remained covered under the presumptive tax regime (PTR) till year 2003 and the tax was withheld at the rate of two percent remains the final discharge of liability.
However, the said regime has been once again reintroduced, but the rate of withholding has been increased to six percent, which is too high for the business.
The transporters have reservations that they were transporting goods to far flung areas of the country, under long-term contracts with certain multi-national companies as well as carrying goods of other intending clients. And that the obligation was being fulfilled by them mainly through hiring of vehicles, which in most cases were driven by the owners and major chunk of the receipts was accordingly passed on to them.
The transporters told the meeting that in case of other services the increase was only one percent while in their case it was four percent, which is arbitrary. The multinational companies were adamant not to revise the tariff therefore, carrying out the business under the circumstances was impossible.
The meeting was also informed that the companies were charging withholding tax at the current rate in respect of the bills submitted before June 30, 2006 but have not been cleared within due date.
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