Ishaq Dar refuses tax waiver on IT exports
The government has dismissed an IT industry’s demand for waiving a ‘negligible’ tax on its services to support the sector’s faltering exports but agreed to provide maximum facilitation, including exemption from audit by the tax authorities. Presiding over a meeting of the IT sector on Sunday, Finance Minister Ishaq Dar observed that the effective tax rate on the sector was about 0.25 per cent, which was “peanuts”. He said people should develop the habit of paying taxes on their incomes instead of seeking exemptions. A tax of Rs2.5 on exports of Rs1,000 is “nothing”, Mr Dar said. He, however, promised that IT professionals exporting their services would not be sent tax notices by the Federal Board of Revenue (FBR) and their tax returns would not be subjected to audit to minimise their revenue cost. Moreover, he also directed the FBR to set up a unit where dedicated officers act as a one-window facility and handle refund and tax credit cases of the IT sector to reduce hassle. Finance Minister Dar is the chairman of the Prime Minister’s Task Force on Information Technology and Telecom. The meeting of the task force was also attended by IT Minister Syed Aminul Haque, Special Assistant to Prime Minister (SAPM) on Youth Affairs Shaza Fatima Khawaja, SAPM on Finance Tariq Bajwa, State Bank Governor Jameel Ahmed, Finance Secretary Hamid Yaqoob Shaikh, IT Secretary Mohsin Mushtaq, and chairpersons of the FBR and the Pakistan Telecommunication Authority.