The government is likely to amend the Finance Bill 2007 with a view to make it mandatory for retailers to declare their last year''''s sales in the income tax returns that they would be filing in September 2007. Sources told Business Recorder on Tuesday that amendments had been submitted to the National Assembly for further necessary action.
The filing of returns by retailers had been mutually agreed by both CBR and retailers in a pre-budget meeting held at CBR House, Islamabad. However, a specific clause to this effect was not mentioned inadvertently in the relevant income tax law. Now, this portion of the agreement would also be incorporated in the Finance Bill.
Following amendment in the Finance Bill, retailers would be legally required to declare their sales of 2006-07 in income tax returns. Under the agreement, retailers whose turnover exceeds Rs 5 million but does not exceed Rs 10 million would be required to pay Rs 25,000 plus 0.5 percent of the turnover exceeding Rs 5 million.
Where turnover of retailers exceeds Rs 10 million, they would be required to pay retail tax of 0.75 percent of the turnover exceeding Rs 10 million. Retailers would not be entitled to claim any adjustment of withholding tax collected or deducted from them under any head during the year.