MONDAY JUNE 20: Amendment to income tax law opposed

ISLAMABAD: Some members of the Tax Reform Co-ordination Group (TRCG) have opposed a proposed amendment to section 18 of the Income Tax Ordinance 2001 pertaining to "Income from Business", through Finance Bill 2011-12.
Sources told Business Recorder here on Sunday that the issue of proposed amendment in section 18 of the Income Tax Ordinance 2001 was discussed during the last meeting of the TRCG, held at the FBR Headquarters here on June 18, 2011.
According to sources, a few members of the TRCG proposed that the explanation added to section 18 of the Income Tax Ordinance 2001 through Finance Bill 2011-12 should be deleted. The proposed explanation should not be made part of the Finance Act 2011.
When contacted, a tax expert explained that an important amendment has been suggested in Section 18 of the Ordinance, which deals with the "Income from Business". This amendment has been made by way of adding the explanation to Section 18(1) (d) of the Ordinance which reads as:
"For the purposes of this clause, it is declared that the word 'benefit' includes any benefit derived by way of waiver of profit on debt or the debt itself under the State Bank of Pakistan, Banking Policy Department, Circular No 29 of 2002 or in any other scheme issued by the State Bank of Pakistan. This amendment has been inserted as the much talked about BPD Circular 29 is under scrutiny before the Supreme Court of Pakistan. "Insertion by way of explanation is a smart move by the FBR as this will be termed as having a retrospective effect," the tax expert opined.