FBR to reconsider brokers’ tax recovery notices

KARACHI: The Federal Board of Revenue (FBR) on Monday assured the stockbrokers that it would reconsider the tax recovery notices issued to brokerages.

A delegation of PSX Stockbrokers Association (PSA) met with Fazal Muhammad Abrejo, chief commissioner of the Corporate Regional Tax Office (CRTO) to discuss the notices issued to stock brokers assessing taxes in billions.

“This was also discussed while we were in Islamabad and in today's follow-up meeting with CRTO Abdur Rehman Khilji was also called to make sure that such notices should not be served and the relevant assessing officer should either be educated or changed,” Adil Ghaffar, general secretary of PSA said in a statement. “CRTO has assured us that department will take care of that officer.”

The FBR served notices to two stock brokers for the recovery of seven billion rupees on transactions involving Rs18 billion, sources told The News last week. Official documents also confirmed that the Regional Tax Office, Karachi served notices to two trading right entitlement certificate holders for the recovery of unpaid taxes.

Ghaffar said an earlier meeting of the PSA’s President Hammad Kehar in October “got an extremely good response” from State Minister of Revenue Hammad Azhar who took notice and called Regional Commissioner to take cognizant of the notices being issued to brokers “creating hefty demands”.

“Regional Commissioner agreed and said that field officers will be instructed,” PSA general secretary cited the tax official as saying. On November 6, PSA delegation also met with Fazal Muhammad Abrejo, chief commissioner of CRTO Karachi who called Khilji at the meeting.

“We were assured that all possible measure would be taken to avoid this type of show cause notice creating hefty demands,” Ghaffar added. The general secretary further said stock brokers also raised the withholding tax issues during the meetings.

“We brought the issues pertaining to members relating to withholding tax monitoring and the officer concerned,” he said. “Furthermore, we asked them to have direct interaction with our members enabling them to understand the business of brokerage and (get) firsthand knowledge of this fully documented sector.”