Exporters would be liable to pay one percent of the export proceeds as "maximum tax" under the proposed amendment in the Finance Bill (2009-10). It is learnt here on Wednesday that the exporters are subjected to one percent withholding tax under Income Tax Ordinance 2001. This tax was deemed to be full and final tax liability.

It was proposed through the Finance Bill that one percent WHT on exports would be treated as "minimum tax liability" and exporters would also be required to file income tax returns under normal law. Source said that due to a typographical error the word "minimum" has been specified instead of "maximum".

By rectification of this mistake, exporters tax liability would not exceed one percent. This is a "maximum tax" instead of "minimum tax". However, exporters would still be required to file normal income tax returns. The typographical error has been rectified by the tax department.

Copyright Business Recorder, 2009