Introduction
The Final Tax Regime (FTR) was introduced in 1991, under the supportive framework of which the SME-driven export industry of Gujrat has thrived and progressed. This policy was instrumental in fostering growth, job creation, and supporting entrepreneurs.
However, the recent policy shift to the Normal Tax Regime (NTR) poses a serious threat to the stability and competitiveness of Sialkot’s businesses.
The Gujrat Chamber of Small Traders & Small Industry (GCSTSI) stands united with The Sialkot Chamber of Commerce & Industry (SCCI) and other prominent associations in urgently appealing to the Prime Minister for the reinstatement of the FTR.
It is perplexing that the same government which recognized the efficacy of FTR in supporting economic growth would now reverse this discerning policy. This is not just a budgetary adjustment but a fundamental measure to sustain our economic prosperity.
Overline
FTR vs NTR
The Final Tax Regime (FTR) and Normal Tax Regime (NTR) are two different methods of calculating income tax in Pakistan. The key differences are:
01
Final Tax Regime (FTR)
Taxes are applied directly to the total income, without considering any deductions.
Income sources under FTR are specific, typically including income from certain services, dividends, and other defined sources.
SMEs in Pakistan benefit more from the Final Tax Regime (FTR) because of simplicity, fewer deductions, and predictability as the tax liability is determined upfront, providing businesses with better financial planning.
02
Normal Tax Regime (NTR)
Taxes are calculated on the profit after deducting all allowable expenses.
Applies to most income sources not covered under FTR.
Tax rates are progressive, increasing with the level of income.
Purpose of the handbook
The primary goal of this handbook is to provide crucial information and support to Pakistani SMEs, including those new to exporting agrifood products. The handbook covers a wide range of products such as fresh fruits and vegetables, processed foods, seafood, spices, nuts, confectionery, and cereals.
The Gujrat Chamber of Small Traders & Small Industry (GCSTSI) recognizes the efforts of the ITC and the UK government and has created this blog for easy access to this information. For a detailed explanation, the handbooks are accessible in both English and Urdu on the GCSTSI website.
Registering Your Export Business in Pakistan
Company Registration: Pakistani citizens with a valid CNIC can register their companies with the SECP. Visit the SECP website for details.
Tax Registration: Exporters must register with the FBR via the IRIS portal to obtain NTN and Sales Tax Registration. Visit the FBR website for more information.
Chambers of Commerce and Trade Associations
Exporters should register with relevant chambers, such as GCSTSI, to benefit from services like obtaining certificates of origin, document attestation, and capacity-building training. Visit the GCSTSI website for more details.
Pakistan Customs
Subscribe to the Pakistan Single Window (PSW) system to streamline export processes. Visit the PSW website for further details.
Trade Development Authority of Pakistan (TDAP)
TDAP offers services like market promotion and international trade fair participation. Women entrepreneurs can join the Women Entrepreneurship Programme for additional support. More information is available on the TDAP website.
Export Processing Zones Authority
Registering with the Export Processing Zones Authority allows exporters to establish units in designated zones, offering benefits like duty-free imports and tax exemptions. Visit the EPZA website for details.