TAX NEWS - June 2010

Pakistan Tax: Senate body meets to resolve FBR, ministry tax issue

The Senate's Standing Committee on Ports and Shipping on Wednesday sought views from the Federal Board of Revenue (FBR) and the Ministry of Ports and Shipping to resolve a tax deduction issue amicably.

In a committee meeting presided over by Senator Gulshan Saeed at the Parliament House, detailed discussions were held on the Rs 8 billion tax deduction by the FBR from the account of the Karachi Port Trust (KPT).

The ministry informed the committee that the FBR had deducted Rs 8 billion from the KPT's account while a case on the issue was still pending in an income tax tribunal in Karachi, calling this action illegal.

In response, FBR Chairman Sohail Ahmed told the committee that the stay orders issued by the income tax tribunal on the KPT application had expired on June 8, 2010, while the tax deduction was made on June 9, adding that nothing had been done illegally.

The committee, after hearing views from both sides, directed the FBR and the ministry to wait for the decision by the income tax tribunal, adding that the tax amount would have to be refunded to the KPT in seven days in case the decision came in its favour.

The committee said the KPT would have to pay the tax according to its balance sheet if the tribunal decided against it.

The committee vowed to make all out efforts to resolve the issue in the best national interest. Senators Gul Muhammad Lot, Almas Perveen, Tariq Azim Khan and Dr Muhammad Ismail Buledi, Ports and Shipping Secretary Muhammad Saleem Khan and other senior officers also attended the meeting.