Business firms evading taxes by offering gifts on TV game shows

 JournalismPakistan.com |  Published 10 years ago

KARACHI: Numerous business firms have been evading taxes of millions of rupees annually by distributing expensive gifts through television game shows.
 
Business Recorder reported Wednesday that many business firms have been evading taxes of millions of rupees by manipulating their ledgers through “sales and promotion of the business.”
 
Section 20 of Income Tax Ordinance 2001 empowers businessmen to deduct sales and promotion expenses from their income taxes and this is done to facilitate taxpayers and registered business units, it said.
 
“The Federal Board of Revenue, which has so far not drafted any mechanism to monitor these 'game shows' for tax collection, was solely depending on business units, which were showing inflated sales and promotion expense to evade income tax,” the report said.
 
It said that several gift items including laptops, smart phones and home appliances being offered on these shows have different price range and business firms, which distribute gifts from low price range, are reportedly showing inflated prices of the same gift items in its sales and promotion expense to evade maximum income tax.
 
The FBR should commence monitoring on withholding tax being deducted under section 156 of ITO-2001 and restrict the business firms and TV channels to provide complete details of gifts being given in the shows to plug the revenue leakages, it said.