FBR to cut minimum tax from 6% to 1%

To revive alternative dispute resolution mechanism.

KARACHI:

Federal Board of Revenue (FBR) Chairman Salman Siddique has said the minimum tax of six per cent on services will be reduced to one per cent and an amended statutory regulatory order (SRO) will be issued shortly.

In a meeting with top representatives of the business community at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) head office here on Friday, Siddique discussed contentious issues and said FBR would expedite the refund of longstanding sales tax claims.

Responding to a query, he said tax audit would be conducted on risk parameter basis for which selection would be made randomly via computer balloting. It was also resolved that valuation data of importers and exporters would be given to the FPCCI.

The FBR would also address the problem faced by the importers due to provisional assessment under Section 81 of the Customs Act, 1969 and finalisation of the importer’s value of goods. The period of provisional assessment would be 120 days only.

Regarding the contention that sales tax of four per cent and six per cent for zero-rated industries was not workable, he said the issue would be addressed in consultation with the FPCCI.

Discussing the menace of under-invoicing and mis-declaration, the FBR chairman said a uniform rate of valuation would be implemented throughout Pakistan. The FBR would also revive the Alternative Dispute Resolution (ADR) mechanism so that out-of-court settlement may be used for sorting out the thousands of cases which were pending in courts.

Siddique agreed to defer the condition of submitting computerised national identity card (CNIC) or national tax number (NTN) for goods suppliers until December 31.

He said Annex F and H of sales tax return form would be revised in consultation with the business community and a one-page, simple substitute would be introduced. Its implementation was also extended up to December 31.

He assured the FPCCI that the tax authority would consider the suggestion of a fixed sales tax scheme for retailers and that tax return forms would be printed in Urdu as well as English.

Published in The Express Tribune, October 29^th, 2011.