Commercial importers demand of restoring FTR rejected

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KARACHI: The government has finally rejected the demand of commercial importers for restoring final tax regime (FTR) and excluding them from audit.
The National Assembly on Friday approved the Finance Bill 2018 giving legal shelter to proposals made through the budget announced on April 27, 2018.
According to commentary on amended Finance Bill 2018, Tola Associates said Section 148 of Income Tax Ordinance, 2001 provides that the tax required to be collected from a person under section 148 shall be minimum tax for a tax year on the import of─
— edible oil;
— packing material; and
— plastic raw material imported by an industrial undertaking falling under PCT headings 39.01 to 39.12.
The bill proposed to further make addition in the list and proposed that tax required to be deducted under section 148 on import of goods, where goods are sold in the same condition as they were when imported; shall also be minimum tax and not Final Tax, however, the act has provided that minimum tax shall be 5 percent of the import value as increased by customs duty, sales tax and federal excise duty.
It explains that e.g. tax at 5.5 percent from a corporate commercial importer (8 percent for non-filer) is collected at the time of import. In such a case, the importer shall calculate and pay its normal tax liability or minimum tax at 5 percent of import value; whichever is higher.
Moreover, the reduced rate of 1 percent (1.5 percent for non filer), for designated buyer of LNG to import LNG, on behalf of government, has been made available to every person importing LNG.