ISLAMABAD: The Federal Board of Revenue (FBR) has not imposed any new indirect tax during the last five years. This act has been taken with an objective to reduce reliance on indirect taxation as well as to lessen the ratio of indirect taxes in the revenue collection.
The revenue collection of Federal Board of Revenue has been registering a worthwhile growth and both the direct taxes and indirect taxes are contributing in the growth.
“Major indirect taxes in the domain of the Federal Board of Revenue are customs duties, sales tax and federal excise duty (FED) and only rates of duties and taxes have been rationalized,” a source at the Federal Board of Revenue (FBR) told Customs Today.
Moreover, the source said that exemptions and zero-rating available under the Sales Tax Act, 1990 had been withdrawn particularly during the last three years in pursuance of policy of the Federal Government to minimize exemptions. It may be noted that dairy products sold in retail packing under a brand name have been subjected to reduced rate of 10 percent.
The source maintained that the only indirect tax that might be treated as imposed during the past five years was further tax under section 3 (1A) of the Sales Tax Act, 1990 which currently was leviable at the 2% on sales to unregistered persons and rationale behind imposition of further tax was to promote documentation of the economy and expand tax base of sales tax registered persons. The Section 3 (1A) pertains to levying of further tax was omitted through Finance Act, 2004 but has been reintroduced through Finance Act, 2013.
Besides further tax the source said that an extra tax @ 5 percent had also been imposed on industrial and commercial consumers of gas and electricity where monthly gas/electricity bills exceeded Rs. 15,000. Rationale behind imposition of extra tax was also to promote sales tax registration.
