The Federal Board of Revenue (FBR) has warned digital platforms that it will not allow them to function in Pakistan unless they pay taxes.
Dr. Muhammad Ashfaq Ahmed, FBR Member Inland Revenue (Operations), announced this during Thursday’s meeting of the National Assembly Standing Committee on Finance and Revenue.
FBR Member Inland Revenue (Operations) revealed that the FBR compelled Netflix to declare Rs 1.4 billion in income tax returns last week.
Throughout the committee discussion, the FBR Chairman and the Daraz team, led by Ehsan Saya, Managing Director Daraz, were blaming one another for the issue of digital platform taxation.
Chairman of the FBR and Member of the FBR inland Revenue (Policy) announced that Daraz agreed to function as a withholding agent and deduct only 2% tax from unregistered merchants. They are no longer abiding by their arrangement. The FBR cut the tax rate from 17% to 2%. The FBR predicted that the taxation of the digital platform will generate Rs. 10 billion, they added.
According to Ehsan Saya, Managing Director of Daraz, it is impossible to act as a withholding agent on behalf of the FBR. We currently share data with the FBR on registered and unregistered merchants, which may be utilised to broaden the tax base.
According to Ahsan Iqbal, rising sectors would collapse as a result of such a levy on digital platforms. They should be allowed time.
The finance committee requested that the idea be deferred for one year by the FBR.