KTBA points out to FBR: dual tax rates at import stage causing delay in production

Dual tax rates at import stage for manufacturers and other importers are hindering the import process, causing delay in production activity. In a letter issued by Karachi Tax Bar Association (KTBA) to the chairman of Federal Board of Revenue (FBR) and Member Inland Revenue, FBR, has highlighted that the taxpayers are facing serious hardship in import process as the rate prescribed in the Income Tax Ordinance 2001 for manufacturers at import stage was 3 percent of the import value and other importer are liable for 5 percent withholding tax of the import value.
Therefore, the customs authorities are asking for reduced rate certificate from the manufacturers. The Bar in its letter demanded to issue reduced rate certificate for manufacturers at import stage to facilitate the trade at maximum.
It further said the clarification issued by the collector Model Collectorate of Custom (MCC) Appraisement as per the decision SL.No 150/2011-CA dated 12.12.2011 forced the manufacturers to produce reduced rate certificate from the respect commissioner (I.R). This procedure is not only creating hurdles in import process but also causing delay in production activities, the Bar maintained.
Keeping all these obstacles in view, the bar suggested to the board that the status of the taxpayer would be verified from the Sales Tax Registration Certificate and in case of multiple business activities; the customs officer should have access to the FBR web-portal to verify the status from the profile of the taxpayer, which would definitely help FBR to deduct exact tax as per the status of the taxpayer.