President of Karachi Chamber of Commerce and Industry (KCCI) Junaid Esmail Makda has urged Federal Board of Revenue (FBR) to withdraw the provisions under 108AB of the Finance Bill 2019-20 that has triggered severe anxiety amongst the business and industrial community. Referring to the section 108AB titled 'transactions under the dealership arrangements,' he rejected the provisions as totally unacceptable.
He said these would result in further choking the businesses. He pointed out that under section 108AB, a person supplying products listed in the Third Schedule to the Sales Tax Act 1990 or any other products as prescribed by the board, under a dealership arrangement with the dealers who are not registered under the Sales Tax Act 1990 and are not appearing in the active taxpayers' list under this Ordinance, an amount equal to seventy-five percent of the dealer's margin shall be added to the income of the person making such supplies.
Moreover, it has also been notified that for the purposes of operation of this section, 10 percent of the sale price of the manufacturer shall be treated as dealers' margin which is injustice to registered persons and filers who have been regularly fulfilling their national obligation.
"Similarly, this and other such legislations are not acceptable as they will result in raising the cost of doing business and will prove to be a barrier in ease of doing business," he said.
KCCI president said on one hand, they already called withholding agents and collectors. And on the other, it seems that the policy makers want them to become enforcers of tax provisions as well although it is purely the job of Federal Board of Revenue.
"This and many other anomalies are an eye-opener for the parliamentarians who must thoroughly review all such irregularities prior to passing the Finance Bill," he said, adding that this was contrary to the understanding with FBR that businesses would be facilitated in the manner of withholding and deposit of tax.
He said this continues to create difficulties for businesses who would have to do the job of the tax authorities, bear costs of additional book keeping and then subsequently face the harassment of the tax officials. He said it would have been better if these taxes and duties were either done away or some compensation were extended to the businesses for performing this additional service on behalf of the tax authorities.
Makda said that Karachi Chamber was currently reviewing the entire Finance Bill, taking input from all stakeholders and identifying several anomalies which will soon be submitted at the FBR with a request to rectify them on top priority basis. He said implementation of such anti-business measures would put the survival of many industries at stake.
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