FBR urged to allow adjustment of further tax

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KARACHI: Federal Board of Revenue (FBR) has been urged that suppliers should be allowed adjustment of further tax against input tax.
Pakistan Tax Bar Association (PTBA) in its proposals for budget 2018/2019, further advised the FBR to issue appropriate clarification that export sales are not subject to further tax.
The PTBA said that further tax charged by the registered person on the supplies made to the person who are required to be registered but does not obtain registration is not available for adjustment against input tax in pursuance of section 7(1) of the Sales Tax Act, 1990.
Moreover, through the Finance Act, 2017, further tax at the rate of 2 percent was also levied on zero-rated supplies.
This results in unnecessary increase in cost of doing business and unrest amongst the taxpayers which is creating a negative business environment.
Due to this amendment, all zero –rated supplies including exports are subject to further tax. Exports are made to non-resident persons who are not required to be registered with Pakistan tax authorities.
Resultantly, the exporters will have the bear the amount of further tax charged to exporters which will badly affect their competiveness in the international market.

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