No free rides: K-P govt to collect cess from freight vehicles
Cargo vehicles to be taxed at entry and exit points
PHOTO: AFP/FILE
PESHAWAR:
The provincial government plans to start collecting infrastructure development and maintenance cess from vehicles that enter
and exit the province carrying freight.
Officials of the Khyber-Pakhtunkhwa Excise and Taxation department privy to the development told The Express Tribune the government would soon publish an advertisement to provide information to people who are likely to be affected by tax collection.
After considerable deliberation and several meetings, the Federal Board of Revenue (FBR) is on the same page with the Khyber-Pakhtunkhwa government – to some extent.
The K-P government has been repeatedly emphasising the need to collect infrastructure development and maintenance taxes from vehicles using its infrastructure and supplying cargo within the country and outside it.
“Pakistan Customs will make a collection module for the job and its implementation will take a week or two,” Khyber-Pakhtunkhwa Revenue Authority Director Operations Shah
Nawaz Khan.
According to the director operations, the tax will be collected at all points where customs duty is collected in K-P through the Web-Based One Custom (WeBOC) system. He added a private company will be tasked to collect the levy for the province.
“The company will get the collection charges and the revenue will go to K-P,” he said.
Approval with caveats
Officials said the excise and taxation department held a meeting with the FBR. The federal government refused to permit K-P to collect cess in the Federally Administered Tribal Areas. Furthermore, the Centre also denied permission to the province to collect cess on vehicles from Afghan Transit Trade (ATT) which is exempted from the tax.
“The FBR has agreed and permitted us to set up tax collection facilitation centres in K-P wherever we [deem fit],” a department official said. “We cannot use the existing Torkham Border facility of Pakistan Customs where all facilities are available. We have to deploy our staff or [employees from a] private firm to start collecting the cess.”
The extra mile
The official criticised the federal government for delaying the proposal for K-P, saying the Sindh government has already been charging the cess. “Our infrastructure is completely destroyed by these vehicles and the province has no
resources to maintain it,” he said.
He also wants the federal government to allow K-P to use the facility at Torkham. This will make it easier for K-P as they will not need to establish its own set-up for the purpose.
“We cannot [predict] the exact number of vehicles that will use the route,” he said. “According to FBR’s figures, 20,000 vehicles use these routes. However, the figure will be much more.”
The official added they would need to weigh the vehicles carrying the cargo to calculate the cess value. This facility is already available at Torkham.
“We will discuss the issue with the chief secretary and will then decide
where to establish the facilitation centre in K-P,” the official said.
He added they can collect cess from the vehicles carrying consignments for Nato and supplies within the country and Waghan Border.
Seeking amendment
When the Khyber-Pakhtunkhwa Collection of Cess for Development and Maintenance of the Infrastructure Rules, 2014 were drafted, the provincial government had proposed 14 tax facilitation centres in K-P and Fata.
“Since the federal government is not permitting the K-P government to collect the tax in the
tribal belt so the rules need to be amended,” Shah Nawaz said.
As per the rules, the rate of cess shall be 1% of the value of the goods entering or leaving the province from within or for outside Pakistan.
The rates vary according to the maximum gross weight of the vehicle. Under the 2014 rules, it will be between Rs10,000 to Rs45,000 per vehicle.
In addition, the calculation and determination of the value of the goods is the responsibility of the facilitation centre using WeBOC or any other system adopted by it.
Published in The Express Tribune, May 2nd, 2016.
The provincial government plans to start collecting infrastructure development and maintenance cess from vehicles that enter
and exit the province carrying freight.
Officials of the Khyber-Pakhtunkhwa Excise and Taxation department privy to the development told The Express Tribune the government would soon publish an advertisement to provide information to people who are likely to be affected by tax collection.
After considerable deliberation and several meetings, the Federal Board of Revenue (FBR) is on the same page with the Khyber-Pakhtunkhwa government – to some extent.
The K-P government has been repeatedly emphasising the need to collect infrastructure development and maintenance taxes from vehicles using its infrastructure and supplying cargo within the country and outside it.
“Pakistan Customs will make a collection module for the job and its implementation will take a week or two,” Khyber-Pakhtunkhwa Revenue Authority Director Operations Shah
Nawaz Khan.
According to the director operations, the tax will be collected at all points where customs duty is collected in K-P through the Web-Based One Custom (WeBOC) system. He added a private company will be tasked to collect the levy for the province.
“The company will get the collection charges and the revenue will go to K-P,” he said.
Approval with caveats
Officials said the excise and taxation department held a meeting with the FBR. The federal government refused to permit K-P to collect cess in the Federally Administered Tribal Areas. Furthermore, the Centre also denied permission to the province to collect cess on vehicles from Afghan Transit Trade (ATT) which is exempted from the tax.
“The FBR has agreed and permitted us to set up tax collection facilitation centres in K-P wherever we [deem fit],” a department official said. “We cannot use the existing Torkham Border facility of Pakistan Customs where all facilities are available. We have to deploy our staff or [employees from a] private firm to start collecting the cess.”
The extra mile
The official criticised the federal government for delaying the proposal for K-P, saying the Sindh government has already been charging the cess. “Our infrastructure is completely destroyed by these vehicles and the province has no
resources to maintain it,” he said.
He also wants the federal government to allow K-P to use the facility at Torkham. This will make it easier for K-P as they will not need to establish its own set-up for the purpose.
“We cannot [predict] the exact number of vehicles that will use the route,” he said. “According to FBR’s figures, 20,000 vehicles use these routes. However, the figure will be much more.”
The official added they would need to weigh the vehicles carrying the cargo to calculate the cess value. This facility is already available at Torkham.
“We will discuss the issue with the chief secretary and will then decide
where to establish the facilitation centre in K-P,” the official said.
He added they can collect cess from the vehicles carrying consignments for Nato and supplies within the country and Waghan Border.
Seeking amendment
When the Khyber-Pakhtunkhwa Collection of Cess for Development and Maintenance of the Infrastructure Rules, 2014 were drafted, the provincial government had proposed 14 tax facilitation centres in K-P and Fata.
“Since the federal government is not permitting the K-P government to collect the tax in the
tribal belt so the rules need to be amended,” Shah Nawaz said.
As per the rules, the rate of cess shall be 1% of the value of the goods entering or leaving the province from within or for outside Pakistan.
The rates vary according to the maximum gross weight of the vehicle. Under the 2014 rules, it will be between Rs10,000 to Rs45,000 per vehicle.
In addition, the calculation and determination of the value of the goods is the responsibility of the facilitation centre using WeBOC or any other system adopted by it.
Published in The Express Tribune, May 2nd, 2016.