Stocks brokers react to FED recovery notices

KARACHI: The Karachi stocks brokers association on Friday reacted strongly to the show cause notices / recovery notices issued to them by the Federal Board of Revenue (FBR) demanding payment of federal excise duty (FED).
“This is tantamount to double taxation and is in total violation of the Constitution of Pakistan,” the association said in a statement.
Yasin Lakhani, President of the association said that after the 18th Constitutional Amendment, the services which were previously subject to FED were transferred to the provinces with effect from July 1, 2011. FBR issued a notification then that FED stood withdrawn in order to avoid double taxation.
“Ever since July 1, 2011 the members of the association had been regularly paying the Sales Tax on services to the Sindh Revenue Board (SRB), but suddenly the members of the Karachi Stock Exchange (KSE) have been sent show cause notices / orders to pay FED to the FBR,” Lakhani said. He said this illegal and coercive step by the FBR had caused great anxiety among the stock brokers who were compliant taxpayers.
The stockbrokers have apprised the SRB, which fully supports the KSE members’ stance and assures that the Sindh government will take up the matter with the federal government to resolve this double taxation issue once and for all.
“The stock brokers are also planning to seek legal remedy through the Sind High Court,” Yasin Lakhani said.