The Punjab Revenue Authority (PRA) aims to collect Rs100 billion in sales tax on services annually over the next five years, after it adds three more services to its ambit – tentatively from September 1.
These include restaurants, franchises and non-classified advertisements in newspapers and periodicals.
Till the additions are authorised, the PRA – which started collecting sales tax on services in July 2012 – has its eyes set on collecting Rs40 billion during its first year in operation. “We have received Rs2,765 million in sales tax on services for July 2012; collections are still in progress as the date for submitting returns and depositing taxes has been extended to August 31, 2012,” said PRA Chairperson Iftikhar Qutab, while briefing members of the Lahore Economic Journalists Association (LEJA) here on Wednesday.
“All provincial taxes – such as the property tax – will also be collected by the PRA within the next three years. These taxes are at present being collected by different provincial departments; a centralised authority will facilitate taxpayers,” he added.
“This year, the PRA will also receive over Rs3 billion from the Sindh Revenue Board (SRB), and a sizable sum from the Federal Board of Revenue, as both authorities are currently deducting Punjab’s share of the General Sales Tax (GST) as well,” he disclosed.
He said this became the reason why Punjab decided to set up its own revenue authority, the PRA. He said it was established on the pattern of the SARA (Semi-Autonomous Revenue Administration) doctrine from the result of a study by USAID. He said the FBR will set up a committee with nominations from all revenue authorities to resolve issues between the FBR, SRB and PRA. A Tax Clearance House has also been proposed by the Punjab on the pattern of the European Union which can resolve tax collection issues such as input adjustment, Qutab said.
Qutab said he believes that GST on non-classified advertisements will generate over Rs300 million monthly in the province. He said he foresees problems in collection of taxes from restaurant services, but added that taxpayers would be rewarded through ballot against their taxed invoices to encourage filing tax returns.
He said the PRA has received a total of 300 returns while 400 people had enrolled themselves with the authority.
Published in The Express Tribune, August 30th, 2012.
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