- IT industry has dismissed the new Final Tax Regime (FTR) as a tax credit program.
- IT industry says FTR standards are the same as the old tax credit plan.
- FBR inspectors have rejected IT firms in the past.
IT industry has dismissed the new Final Tax Regime (FTR) as a tax credit program.
According to the IT industry, FTR criteria are identical to the tax credit plan the previous government terminated at the industry’s request. The sector believes government measures hinder business and frequent policy changes hurt IT investment.
Ahmed Syed, ex-chairman of PASHA, told that Imran Khan’s government abolished the tax credit scheme and introduced a tax exemption scheme. After promising to preserve the same tax exemption arrangement, the current government established FTR.
If the inspector had cleared IT companies, they would have gotten 100% tax credit, he said. Under the new FTR system, IT companies must pay 0.25 percent tax following Inspector clearance.
Ahmed Syed stated there was no inspection in the tax exemption scheme, but under the FTR system, corporations or their representatives must appear before the FBR inspector. If the official is not pleased, companies must pay a 1% tax
CCP wants businesses to display their products.
Despite a low tax rate, human factors have fostered corruption. Past inspectors harassed firms. FBR inspectors have rejected IT firms in the past. If companies are registered and taxed, they pay four to five separate taxes, but the government loses billions to collect Rs. 6 to 7 million, he said.
The FBR explained the IT tax, but the industry felt this was a justification for the FTR system.
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