ISLAMABAD: Federal Minister for Finance and Revenue, Shaukat Tarin, presided over the meeting of the National Tax Council (NTC) at the Finance Division today. Provincial Finance Ministers, Secretary Finance Division, Chairman FBR, Chairman Sindh Revenue Board, and other senior officers also participated in the meeting.
In his opening remarks, the finance minister welcomed the participants and emphasized the need for evolving consensus between the Federation and Provinces in matters relating to Sales tax harmonization. He stressed the need to resolve tax-related issues in a spirit of cooperation between the Federation and the Federating units.
The FBR Chairman made a detailed presentation and outlined areas for further deliberation to work out an arrangement in a collaborative manner relating to the harmonization of GST amongst the Federal Government and the Provinces. FBR and the provincial finance ministers narrated their respective positions on the taxation of transportation, restaurants, toll manufacturing and construction.
Different proposals were also considered by the NTC for implementing a single portal for filing Sales Tax returns which is being developed and is likely to be launched by the first week of October 2021. The launching of a single portal for filing returns will cut the compliance cost for the taxpayers and will help increase Pakistan’s rating on Ease-of-Doing Index. It was decided that detailed input will be invited from Provincial Revenue Authorities (PRAs) for the development of a single Sales tax portal acceptable to all. Similarly, FBR shall also develop a standardized Income tax Return format, in consultation with the provincial governments.
After due deliberation with all relevant stakeholders, the NTC decided that the sales tax on toll manufacturing will rest with the federation, while taxation rights on transportation business would be vested in the provinces. Regarding taxation on the construction business, it was decided that the taxation right would be shared as per the constitutional arrangements, and a technical committee consisting of all revenue authorities would decide the operational modalities. On taxation of restaurants, the finance minister in his capacity as head of NTC and after having views of FBR and provinces, decided that the provinces will continue to tax restaurants. However, a reference drafted in consultation with provinces will be sent to the Law Division for an opinion on the decision.
All stakeholders agreed to proceed ahead in the spirit of greater national interest and harmony under the umbrella of the NTC.