The Federal Board of Revenue (FBR) is planning to bring common returns filing and tax payment system under the head of sales tax, media sources have reported.
The provincial authorities, however, are resisting the move and are reluctant to adopt or synchronise with the system. This is leading to a delay in its implementation, the officials have stated. The provinces of Sindh and Punjab are prepared to adopt the system, but KP revenue board is still in the process of devising its system while Balochistan revenue authority is in its preliminary phase. Since all the provinces are not yet ready, it may not be possible to agree on a common platform, an official from the Federal Board of Revenue (FBR) stated.
The official revealed that under the new system, tax filing is likely to ease out as there will be a single tax return form and the taxpayer will have to select the appropriate authority for payment. Taxpayers currently have to deal with five revenue authorities – 1 federal and 4 provincial, for the filing of tax returns and payment of duty and taxes.
After the 18th Amendment to the Constitution came into effect, the responsibility of sales tax collection was entrusted to the provincial authorities. With Karachi being the country’s financial hub, the Sindh Revenue Board was devised followed by Punjab, KP, and lastly Balochistan. The 18th amendment, however, resulted in making tax filing a cumbersome process for people who worked inter-province and now had to deal with more than one jurisdiction rather than just the FBR.
The introduction of the new system is therefore focused at granting all the authority to the FBR, hence the move being opposed at the provincial level.
The official from the FBR went on to suggest that for this purpose there should be two separate bodies working together. The officials of the Sindh Revenue Board (SRB) stated that it is the federal authorities who are not keen to merge the sales tax on services to facilitate taxpayers. An official from the SRB also stated that the board had suggested to the Pakistan Revenue Automation (Pvt) Limited (PRAL) that they develop a single reporting system for taxpayers to operate simultaneously under the authority of the FBR and SRB but no response has been reported on this.
