ISLAMABAD: Federal Board of Revenue (FBR) Chairman Tariq Bajwa will lead a six member delegation on five day official visit to Turkey today (Saturday) to share experiences and proposals regarding taxation with Turkish experts.
The delegation will remain in Turkey till March 26 and will interact with Turkish tax authorities.
Revenue Administration is a public institution of Turkish Republic operating under Ministry of Finance and Revenue Administration is responsible for levying and collecting state taxes and respecting the taxpayer rights within the framework of Constitutional Law and tax legislation.
“The delegation comprise, Member Inland Revenue Policy Shahid Hussain Asad, Member Inland Revenue Operations Muhammad Ashraf Khan, Special Assistant to Chairman Muhammad Iqbal, Member Nadeem Dar and others” a well placed source told this scribe.
The visit is part of activities under an Memorandum of Understanding (MoU) signed with Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), which is an international enterprise owned by the German Federal Government, operating in many fields across more than 130 countries.
Good governance, Good governance is a key issue. The objective in this area is to strengthen development-oriented conditions which will have a spin-off effect in other priority areas.
During stay in Turkey, the delegation will get briefing from Turkish tax authorities on Turkey’s tax system as well as tax incentives. The delegation will also share experiences and proposals for making an effective system for broadening tax collection network.
The participants of the delegation will also interact with Turkey’s taxpayers to monitor and gauge the effectiveness of tax collection system. In this regard, the delegation will attend interactive sessions with the host authorities.
Turkish direct taxation system consists of two main taxes; income tax and corporate tax. An individual is subject to the income tax on his income and earnings, in contrast to a company which is subject to corporate tax on its income and earnings.
The rules of taxation for individual income and earnings are provided in the Income Tax Law 1960 (ITL). Likewise, the rules concerning the taxation of corporations are contained in the Corporation Tax Law 1949 (CTL).
Despite the fact that each is governed by a different legislation, many rules and provisions of the Income Tax Law also apply to corporations, especially, in terms of income elements and determination of net income.
Similarly, there are several indirect taxes but most important indirect tax is V.A.T in Turkish Indirect Tax System which levies value added tax on the supply and the importation of goods and services. VAT is levied at each stage of the production and the distribution process.
Although liability for the tax falls on the person, who supplies or imports goods or services, the real burden of VAT is borne by the final consumer. This result is achieved by a tax-credit method where the computation of the VAT liability is based on the difference between the VAT liability of a person on his sales (output VAT) and the amount of VAT has already been paid on purchases (input VAT).
