Tax is a fact of life for corporate sector: workshop toldDecember 30, 2013
KARACHI: “Tax is a fact of life for corporate sector. There is no escape from onerous tax obligations. Corporate sector collects taxes for the treasury on a wide range of payments it makes from salary to the purchase of goods, under the withholding regime. The multiplicity of taxes requires corporate sector to adopt the most effective practices for compliance.”
This was stated in a two-day workshop on Corporate Tax Practices presided over by Altaf Noor Ali, a senior chartered accountant and attended by senior finance professionals. He said that each corporate is effectively a tax collection, deduction, payment and recording point as a “withholding agent.
This unpaid legal designation comes with tight deadlines for deposit of taxes in the treasury and stiff penalties for non-compliance. The scenario becomes even more complicated when one adds the obligations for sales tax and provincial tax. To address it effectively, the corporate sector may even consider creating a full-fledged in-house tax department to provide one-window operation. He reminded the participants that the government revenue collecting mechanism is a major stakeholder in almost every corporate.
He said that the tax spot light is on Individuals with salary as the main source of income. Almost all that an employer’s pays or perk is under tax net. As such, there is no tax effective salary structure. The end-of-service-benefits are relatively tax-free with proper recognition sought from the taxman. Employers offer pension, gratuity, and/or provident fund. Recognised Superannuation Fund and Benevolent Fund can also provide relief. Some relief as tax credit may be claimed by investing in private pension funds.
The workshop also emphasised educating corporate employees to arrange their tax affairs in tax effective manner. Facilitating employees to know salient features of tax practices help reduce their worries keep them focus on the jobs they do best. Besides it saves everyone’s precious time in consulting accounts and finance department”.