ISLAMABAD, June 15: Chairman Central Board of Revenue (CBR) Abdullah Yousuf on Friday announced to defer applicability of special schedule of income tax assessment for banks till the tax year 2009.

The decision was taken following the filing of a notice in the National Assembly by the banking sector proposing amendment in the Finance Bill 2007.

The CBR chairman disclosed the decision at a post-budget seminar jointly organised by the Institute of Chartered Accountants of Pakistan (ICAP) and Rawalpindi-Islamabad Tax Bar Association.

Through the Finance Bill 2007, the government had proposed a range of amendments in the income tax law for computing income, profits and gains of banking companies in a bid to streamline taxation of banking sector.

A new section 100-A together with the seventh schedule had been introduced, which was supposed to be effective from tax year July 1, 2007.

The fundamental principle envisaged in the rules is that the profits and gains of a banking company for the purpose of taxation shall primarily be the pre-tax net profits from all sources as computed in the annual financial statements that are submitted to the State Bank of Pakistan.

The chairman CBR said that government was trying to create an environment conducive for investment. All policies being framed with keeping in mind that “we have to encourage further investment.”

“We are trying to compete with the world by improving quality of our products,” he added.

Reply to a query on different stages of taxation on salaried class, chairman CBR said that historically, “we had a very complicated law of taxation on income from salary but last year we took a massive exercise and today our taxation on income from salary is progressive and aggressive as compared to any country in world.”

Mr Yousuf said the CBR was setting up 13 regional tax offices (RTOs) and three large taxpayers units (LTUs) in the next few months. Four out of 13 RTOs and two LTUs are also functional.