KTBA demands clarity on income tax

KARACHI: The Karachi Tax Bar Association (KTBA) is calling for a clearer interpretation of the tax obligations imposed by Sections 236G and 236H of the Income Tax Ordinance, 2001.

In a recent letter to the Federal Board of Revenue (FBR), the KTBA highlighted the confusion arising from changes introduced by the Finance Act, 2024.Previously, income tax on sales of goods was collected from only 22 specific sectors. However, recent amendments have extended this requirement to all sectors of the economy. This includes transactions by manufacturers, commercial importers, distributors, and dealers under these two sections.

The KTBA’s letter adds that both tax bar members and taxpayers have identified several scenarios that reveal ambiguities in applying these two sections. The association stresses that if a manufacturer or commercial importer sells directly to an end consumer, not to a dealer, distributor, wholesaler, or retailer, the provisions of these sections should not apply.The KTBA points out that Sections 236G and 236H are intended to cover the entire supply chain, from manufacturer or commercial importer to retailer.