LAHORE: Special Assistant to Prime Minister on Revenue Dr Waqar Masood Khan has said that the government intended to remove linkage of investment with tax exemptions, saying that the Federal Board of Revenue is working on this initiative.
Talking to this scribe, he said it is unfortunate that half the Income Tax Ordinance 2001 is consisted of the law while the remaining half is all about exemptions from this law.
"We are committed to rewriting the income tax law and reduce the number of exemptions as much as possible."
It is worth noting that a good number of exporters are pointing out the lacuna in Section 65(b) of the Income Tax Ordinance which offers the incentive of return of the credit on initial investment for the purpose of new installment of machinery, balancing, modernization and replacement (BMR) or expansion of existing units. However, this incentive is not being extended to the exporters who are exporting 100 percent from the country and only those are accommodated who are selling their products in domestic market as well. But the spirit of the provision is to attract fresh investment and exporters are of the view that they should be provided with the return of credit facility after a fixed period on their investment in the industry.
The Corporate Tax Office (CTO) Lahore sources have informed that a large number of exporters are approaching them in this regard. Chief Commissioner CTO Lahore Amna Hassan has made it clear that the CTO would not be able help out the exporters until there is a written instruction from the Board. Accordingly, the exporters have reached their respective associations for a way out.
He said the present tax ordinance was finalized some 20 years ago and a good time has already been lapsed and the Board is working on rewriting it. When asked about the fate of existing credit claims, Dr Khan made it clear that the new law would not hit these cases and they would be protected in revised version of the Ordinance as well.
Copyright Business Recorder, 2020
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