Three general sales tax rates will be implemented in the country simultaneously because of lack of coordination between centre and provinces in the matter of budget preparation.
The federal government has fixed sales tax rate at 17% while it is 16% in Punjab. Sindh, on the other hand, has further reduced it to 15%. According to analysts, three different sales tax rates in the country will not only create confusion in taxpayers’ minds but also result in complexities in input tax adjustment between centre and provinces.
According to sources, provinces are not happy with this anomaly as it was earlier decided in the Council of Common Interests that centre will consult provinces during budget formation and change in tax rate will be decided mutually so that uniform tax rate may be imposed all over the country but apparently centre did not coordinate with provinces in this respect.
Published in The Express Tribune, June 25th, 2014.
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