KARACHI: The Federal Budget 2018-19 has proposed to treat income tax paid by the commercial importers as minimum tax instead of final tax, which means commercial importers are now required to file income tax returns.
At present the tax collected under section 148 of the Income Tax Ordinance, 2001 from commercial importers at the import stage is final tax, therefore, commercial importers are not required to file their return of income and compute their taxable income.
This leads to under-invoicing, domestic transfer pricing and evasion of tax. Tax collected from commercial importers at the import stage shall now constitute minimum tax instead of final tax, therefore, commercial importers shall be required to file their returns of income depicting their taxable income. This measure is also a step towards gradual phasing out of the final tax regime.