ISLAMABAD: The Federal Board of Revenue (FBR) and HM Revenue & Customs the UK have agreed to work together to improve tax collection and check revenue leakages.
The understanding was reached during the recent visit of Prime Minister Nawaz Sharif to the UK while FBR Chairman Tariq Bajwa and senior tax officials also visited HM Revenue and Customs UK to enhance cooperation last month.
The Pakistani and British tax high-ups firmed up their resolve to work together and benefit from each other’s experiences. They discussed areas of risk-based audit, accurate valuation of imported goods, extending value added tax (VAT) to retail sector, documentation of retailers’ community and preventing revenue leakage to generate additional revenue. Pakistani tax authorities also met officials of the Department for International Development (DFID) during their visit to UK.
The extension of the VAT system to the retail sector has become a challenging task for the FBR which has been trying to lower tax rates, implement special time bound schemes, simplify return forms etc, but all to no avail. FBR together with HM Revenue and Customs examine policy measures and taxation systems enforced in UK. They Pakistani tax wizards also expressed the desire to expand VAT chain to retailers under the guidance of HM Revenue and Customs. The UK tax authorities would also provide guidance to the FBR to check revenue leakages using scientific methods and policy measures.
