ISLAMABAD: The Federal Board of Revenue (FBR), in a bid to broaden the tax base, is carrying out a comprehensive review of general sales tax (GST) regime prior to forwarding budgetary proposals to the Finance Division for the budget 2016-17.
Sources told Customs Today that in view of comprehensive review of the GST, focus of the officials concerned was on the consolidation of rules, special procedures and schedules, various applicable rates and special concessionary rates incorporated into a single sales tax manual.
The Sales Tax Act 1990 provides details of applicable rates of GST for different sectors such as manufacturing, import, wholesale, retail and services.
The source said that main focus of the team was to review of over 1200 SROs just in sates tax regime, sales tax act 1990, sates tax rules 2006, sales tax special procedures (withholding) rules, sales tax special procedure rules 2007 and general orders/ circulars and rulings.
The source added that existing laws and ordinances had resulted in the narrow tax base and incentive for evasion and undocumented economy. Moreover, this situation led to the frequent cases of tax evasion, litigation cases by the litigants as well as reduced volume of revenue collection.
The source further said that comprehensive review of GST tax regime will benefit in broadening of tax base and easing of doing business. Moreover, it will help in the curtailment of discretionary powers delegated to some authorities and organizations.
Furthermore, this process will also result in the simplification of taxation regime and envisaging to reverting to original value added tax (VAT) mode.
