KTBA asks FBR to cut tax rates

The Karachi Tax Bar Association (KTBA) has asked the Federal Board of Revenue (FBR) to reduce tax rates and address barriers which impede smooth business operations. In its budget proposals for 2023-24, the association on Tuesday recommended reducing the withholding tax rate to 1pc and allowing the tax withheld as input tax to registered taxpayers upon providing the necessary identification of unregistered suppliers. It noted that the 3pc sales tax to unregistered taxpayers creates an undue burden because of the current definition of active taxpayers. It was proposed to revise the definition of an active taxpayer or reverse the application of further tax to persons other than active taxpayers. The current definition of “persons having industrial or commercial connections” burdens all taxpayers, including service providers and suppliers of exempt goods. It was proposed to amend the definition to clarify that it applies to persons in both the income tax and sales tax regimes.