Brokers association: Body hits out at FBR for demanding FED
KARACHI: The Karachi Stock Exchange (KSE) Stockbrokers Association has lashed out at the Federal Board of Revenue (FBR) for causing ‘great anxiety’ among compliant taxpayers.
In a statement issued on Friday, the association said the FBR has been sending show-cause notices and orders to members of the KSE, asking them to pay the federal excise duty (FED).
Tax collection on services, which were originally subject to the FED, was transferred to the provincial authorities with effect from July 1, 2011, following the passage of the 18th Constitutional Amendment. The FBR had issued a notification to that effect, saying the FED stood withdrawn in order to avoid double taxation, the statement said.
Therefore, the KSE stockbrokers have been regularly paying sales tax on services to the Sindh Revenue Board (SRB) since July 1, 2011, it added. While the FBR has not collected this ‘illegal levy’ since 2011, the association said the federal authority is once again bent on recovering the FED from Karachi-based brokerages.
“This is tantamount to double taxation and in total violation of the constitution of Pakistan,” it said, adding it appeared to be a well-thought-out policy of the federal government, particularly the FBR, to target and harass the taxpayers of Sindh.
The statement said the stockbrokers have informed the SRB about the situation and the provincial tax collection authority “fully supports the KSE members’ stand”. The stockbrokers are also planning to seek legal remedy through the Sindh High Court, the statement said.
