Punjab revenue body starts functioning

It will collect sales tax from 14 sectors, 20% increase likely.

Anwer Sumra July 26, 2012


The Punjab Revenue Authority (PRA), established to collect sales tax on services, has started functioning with the hope that the province may achieve a 20% increase in sales tax collection in the current fiscal year.

Finance Secretary Tariq Mehmood Bajwa formally launched the website of PRA on Thursday to facilitate taxpayers while Iftikhar Qutab, an officer in BS-20 of the Customs group, was appointed the first chairperson of the authority.

PRA asked all institutions engaged in providing services in 14 sectors to file sales tax returns for July through the authority’s e-portal, it was learnt.

PRA was set up under the Punjab Revenue Authority Act 2012 passed by the provincial assembly in an attempt to collect sales tax on services from July this year.

Previously, all service providers were paying sales tax to the Federal Board of Revenue (FBR) with Punjab’s share in fiscal year 2011-12 calculated at Rs33 billion, an official close to the development said.

The passage of 18th Constitution Amendment from the National Assembly in 2010 ended the dispute between the central government and provinces over sales tax collection on services as the law allowed provinces to collect the tax. It would also save the provinces the service charges imposed by the FBR for sales tax collection on their behalf, the official said.

He expressed the hope that with the functioning of PRA, revenue collection from services in Punjab would increase by 20% in the current fiscal year.

How will PRA work

Besides the chairperson, the PRA has four members and a secretary. It will pursue its policy and perform other important tasks under the guidelines of an advisory council consisting of the provincial finance minister, chief secretary, authority’s chairperson, finance secretary and four members from the private sector.

Headquartered in the finance department at the Punjab Civil Secretariat, the PRA will establish commission offices at the divisional level in phases.

Initially, the PRA will collect sales tax on 14 services and later expand its base and scope through research and development. It will also take over management of other provincial taxes and levies.

It will collect sales tax from 4,250 institutions and individuals engaged in providing services in the 14 sectors including hotels, clubs, caterers, advertisements on mass communication channels, customs agents, ship handlers, stevedores, telecommunications, insurance and re-insurance, banking companies, non-banking financial institutions, stock brokers, shipping agents and courier services.

Published in The Express Tribune, July 27th, 2012. 

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