Shabbar Zaidi, the FBR Chairmann, held conference on this new issue of PRA.
ISLAMABAD: (Urdu Point/Pakistan Point News-Nov 6th, 2019) Pakistan Revenue Authorityt would be set up only after taking stake holders on board, Federal Board of Revenue Chairman Shabbar Zaidi said on Wednesday.
According to the sources, Shabbar Zaidi showed flexibility after he could not win support from within the tax machinery during the two days of deliberations at the forum of Chief Commissioners of Inland Revenue (CCIR) conference.
The FBR’s Inland Revenue Service had already opposed the arbitrary decision of replacing FBR with Pakistan Revenue Authority.
In a major development, PM Imran Khan approved a plan for restructuring the FBR in an interim period and then setting up PRA in the next eight months.
“I thank all the CCIR of IRS for a very productive meeting. Restructuring/transformation of FBR will be undertaken after taking into account feedback of all the stakeholders. Whole organisation including all levels of staff will be taken into consideration,” Zaidi tweeted at the end of the two-day conference.
The sources said that Prime Mininster Imran Khan approved the plan of restructuring of the entire tax machinery and introudcing a centralized collection of general sales tax (GST) on services and goods.
The sources said that Pakistan Revenue Authority would have 12 members including customs member operations south and north and two more members for transit trade and exports; legal and accounts.
However, the sources revealed that the Inland Revenue Service (IRS) chief commissioner opposed the new move in a meeting held with the relevant authorities yesterday. IRS officers, accoridng to the sources, would hold meeting with FBR Chairman on Tuesday (today) to submit thier concerns before him. IRS and Customs both, the sources said, have threatened the government to go on the strike if the proposed plan was not dropped.
They further said that the government has decided to form a joint committee comprising representatives from Ministry of Finance, the FBR and provincial revenue authorities to finalise a proposal regarding the issue of centralised collection of GST on services.
Keeping in view the new proposal, Ministry of Finance will prepare a comprehensive framework for PRA and centralised GST collection on services by the PRA. The sources said that the World Bank also funded the move for tax reforms under the project namely " Pakistan Raises Revenue Project". The sources privy to the development also said that the finance ministry would chalk out a plan as how to transfer tax proceeds of GST on services to provinces.
The new move of centralized tax collection is being taken as the FBR and the provincial authorities face issue of jurisdiction that ultimately create problem for all of them regarding the tax collection potential. Conflict of interests and cross-provincial jurisdictional issues create trouble in GST collection on services. The experts, however, said that the proposed plan would face huge resistance from the provinces just because it was againist the Constitution and also becacuse the provincial tax authorities collect sales tax on services in the light of the 1d8th amendment of the Constitution.
The sources also stated that two deputy chairman for each IRS and Customs are expected to be appointed by Nov 30 and the FBR would be reorganized on functional lines by segregating IRS and Customs.
FBR chairman would lead the tax body along with two deputy chairmen — IRS and customs. Moreover, a separate secretary for Revenue Division with four additional secretaries to deal with policy issues—customs policy, income tax policy, sales tax and federal excise duty and international conventions, finance action would also be appointed.
It may be mentioned here that tax collection in Pakistan is a big challenge for the government as the influential people cocnceal their properties and assets to avoid payment of tax.
